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Monthly View - September 2026

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Bonds
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Equities’ broadening earnings growth offsets bond yield concerns - Monthly View - September 2026

by Willem Sels, Global Chief Investment Officer, HSBC Private Bank and Premier Wealth
Aug 27, 2026

  • Bond yields have been volatile recently, largely due to concerns over bond supply from the US government and hyperscalers. While these worries won’t quickly disappear, real yields are now at attractive levels and credit spreads are not seeing much pressure. So while short-term volatility could persist, there is value in bonds for investors who can take a longer-term perspective
  • Bond yield volatility should not cause material or lasting damage to equity markets, because stocks are supported by broadening earnings growth, across sectors and regions. AI-led innovation and investment not only benefits IT, but also industrials and financials; and not just in the US but in North Asia too
  • We broaden our exposure further by upgrading Japanese stocks to overweight. Japan provides attractive options in the tech and advanced manufacturing space while financials should benefit from the recent steepening of the yield curve. Japanese stocks also tend to be a great diversifier for global equity portfolios. JPY intervention puts a floor under JPY, which should provide some comfort and benefit equity risk appetite
  • Even in Europe there are plenty of beneficiaries of rising productivity and investment so we cover our small underweight, lifting the region to neutral

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