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Monthly View - October 2026

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This insight is about
Fed
GIC
Inflation
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China

Teflon stock markets supported by structural trends. We move China's stocks and USD to neutral - Monthly View - October 2026

by Willem Sels, Global Chief Investment Officer, HSBC Private Bank and Premier Wealth
Sep 24, 2026

  • In spite of the many uncertainties, stock markets are not far from their peak, thanks to broadening earnings growth and support from structural trends and strategic investments
  • The Fed meeting improved its inflation fighting credentials and credibility, which may ease bond and stock volatility
  • The hawkish Fed tone made markets price in three further US rate hikes by June, which seems excessive. Therefore, USD should see less support and we downgrade USD to neutral
  • China’s growth outlook remains K-shaped, with strong exports and IT but sluggish consumption and investment. The stock performance is therefore also K-shaped and we move China stocks to neutral
  • US midterms often lead to some mild volatility, but the markets have proven that they are resilient. We maintain our risk-on stance and invest in structural trends like AI and energy independence, while keeping appropriate diversification

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