September 2026
21 September 2026
Q1. Strong earnings are lifting markets — but is this pace sustainable?
Q2 earnings were exceptionally strong and broad-based, but the pace is unlikely to be repeated in 2027 given some exceptional items. However, consensus earnings expectations are still very healthy, with resilient macroeconomic activity providing support. We remain mildly overweight US equities, while diversifying into select Asian markets and favouring IT, industrials, financials and commodity sectors.
Q2. What can broaden US equity returns without chasing AI at these levels?
The US equity opportunity is broadening as re-industrialisation, AI-driven electricity demand and energy security drive substantial capex across the economy. Industrials, materials, financials and grid infrastructure stand to benefit, while AI remains central through its next phase of diffusion and monetisation. We favour broadening exposure rather than rotating away from AI, with a focus on sustainable earnings growth.
Q3. Can Bessent’s Treasury buybacks ease pressure on bonds?
Bessent’s doubling of long-end Treasury buybacks should improve liquidity and offer support, but it doesn’t change the fiscal outlook or Fed policy. With inflation and fiscal discipline still key concerns, the impact on long-term yields is limited. We like to lock in attractive real yields of medium duration high quality bonds, favouring IG in EM and DM. Alternatively, active management can benefit from volatility.
Q4. Could US midterms put the tech rally at risk?
The data centre debate is becoming increasingly bipartisan, with concerns over electricity costs, grid capacity and local opposition gaining traction. Yet we do not see it derailing the AI rally, given strong earnings, robust demand and financing commitments. We remain overweight AI, prioritising monetisation, and prefer cloud, semiconductor and AI-enabled applications, while favouring grid and utilities.
Q5. Do South Korean tech stocks offer enough upside to justify the risk?
Yes. South Korean tech stocks offer sufficient upside to justify the risk, supporting our mild overweight there. The recent correction has flushed out excess leverage without undermining the AI-driven earnings story. Attractive valuations, tight memory supply and strong earnings growth support the outlook, alongside the Value-Up programme and scope for higher shareholder returns.
Q6. How much is foreign-government selling adding to US Treasury pressure?
Foreign selling has added to Treasury market pressure, but demand remains orderly. In our view, the sell-off has primarily reflected heavy Treasury and hyperscaler supply, while its concentration at the long end also reflects a lack of clarity around the Fed’s policy path. With real yields and term premia elevated, we clip coupons and prefer medium duration in IG corporate bonds while remaining neutral on Treasuries.
Related Insights
Disclaimer
THE CONTENTS OF THIS DOCUMENT HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN THE PEOPLE’S REPUBLIC OF CHINA OR ANY OTHER JURISDICTION. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE INVESTMENT AND THIS DOCUMENT. IF YOU ARE IN DOUBT ABOUT ANY OF THE CONTENTS OF THIS DOCUMENT, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.
This document has been issued by HSBC Bank (China) Company Limited (the “Bank”) in the conduct of its regulated business in China. It is not intended for anyone other than the recipient. The contents of this document may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose. This document must not be distributed to the United States, Canada or Australia or to any other jurisdiction where its distribution is unlawful. All non-authorised reproduction or use of this document will be the responsibility of the user and may lead to legal proceedings.
This document has no contractual value and is not and should not be construed as an offer or the solicitation of an offer or a recommendation for the purchase or sale of any investment [in any jurisdiction in which such an offer is not lawful] or subscribe for, or to participate in, any services. The Bank is not recommending or soliciting any action based on it.
The information stated and/or opinion(s) expressed in this document are provided by HSBC Bank (China) Company Limited. We do not undertake any obligation to issue any further publications to you or update the contents of this document and such contents are subject to changes at any time without notice. They are expressed solely as general market information and/or commentary for general information purposes only and do not constitute investment advice or recommendation to buy or sell investments or guarantee of returns. The Bank has not been involved in the preparation of such information and opinion.
The Bank and HSBC Group and/or their officers, directors and employees may have positions in any securities or financial instruments mentioned in this document (or in any related investments) (if any) and may from time to time add to or dispose of any such securities or financial instruments or investments. The Bank and its affiliates may act as market maker or have assumed an underwriting commitment in the securities or financial instruments discussed in this document (or in related investments) (if any), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform investment banking or underwriting services for or relating to those companies.
The information contained within this document has not been reviewed in the light of your personal circumstances. Please note that this information is neither intended to aid in decision making for legal, financial or other consulting questions, nor should it be the basis of any investment or other decisions. You should carefully consider whether any investment views and investment products are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances and make investment decision on your own. The relevant product offering documents should be read for further details.
Some of the statements contained in this document may be considered forward-looking statements which provide current expectations or forecasts of future events. Such forward looking statements are not guarantees of future performance or events and involve risks and uncertainties. Such statements do not represent any one investment and are used for illustration purpose only. Customers are reminded that there can be no assurance that economic conditions described herein will remain in the future. Actual results may differ materially from those described in such forward-looking statements as a result of various factors. We can give no assurance that those expectations reflected in those forward-looking statements will prove to have been correct or come to fruition, and you are cautioned not to place undue reliance on such statements. We do not undertake any obligation to update the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in the forward-looking statements.
Investment involves risk. It is important to note that the capital value of investments and the income from them may go down as well as up and may become valueless and investors may not get back the amount originally invested. Past performance contained in this document is not a reliable indicator of future performance whilst any forecasts, projections and simulations contained herein should not be relied upon as an indication of future results. Past performance information may be out of date. For up-to-date information, please contact your Relationship Manager.
Investment in any market may be extremely volatile and subject to sudden fluctuations of varying magnitude due to a wide range of direct and indirect influences. Such characteristics can lead to considerable losses being incurred by those exposed to such markets. If an investment is withdrawn or terminated early, it may not return the full amount invested. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavourable fluctuations in currency values, from differences in generally accepted accounting principles or from economic or political instability in certain jurisdictions. Narrowly focused investments and smaller companies typically exhibit higher volatility. There is no guarantee of positive trading performance. Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in some established markets. Economies in emerging markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries in which they trade. Investment schemes are subject to market risks. You should read all scheme related documents carefully.
Copyright © HSBC Bank (China) Company Limited 2026. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank (China) Company Limited