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Investment Monthly: Differentiation matters as the market rally continues

1 Jun 2026

Willem Sels
Global Chief Investment Officer,
HSBC Private Bank and Premier Wealth

Lucia Ku
Global Head of Wealth Insights,
HSBC International Wealth and Premier Banking 

Key takeaways

  • We expect the market rebound in April to continue as significant investments in AI, security and energy independence should keep activity going, supporting margins and earnings. However, the lagged impact of the Middle East conflict may create short-term volatility. To build portfolio resilience, we employ a multi-asset strategy and add alternative assets to enhance diversification.
  • As high energy prices have raised inflation expectations, we favour the US and mainland China over oil-importing markets and prefer energy stocks to consumer staples stocks across regions. In addition to higher inflation and lower growth risks, political uncertainty over the UK government leadership and fiscal concerns weigh on UK gilts. As a result, we downgrade gilts to neutral and expect two 0.25% rate hikes by the Bank of England this year.
  • The US-China summit concluded with a potential tariff reduction in “non-critical and non-strategic" areas, along with China’s purchases of aircraft and other goods, as well as the establishment of a Board of Investment to boost China’s overseas direct investment in the US. The summit has helped restore some degree of business confidence and is aligned with China’s pro-growth stance. The improved bilateral relations further reinforce our overweight position on Chinese equities.

Talking Points

Each month, we discuss 3 key issues facing investors

Asset Class Views

Our latest house view on various asset classes

Sector Views

Global and regional sector views based on a 6-month horizon

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