2026-03-12 12:01

Market outlook remains promising amid shifting narratives As we enter the second quarter of this already eventful year, it’s worth reflecting on what’s changing – and what we should do next. So far, our multi-asset strategy has proven to be a winning formula for navigating the fast-changing environment, and we remain committed to it. Recent weeks and months have clearly demonstrated that the financial landscape remains highly volatile and can change dramatically with little warning. Market narratives have shifted from concerns about rising fiscal deficits and the impact of AI on software companies, to new US tariffs, the appointment of a new Federal Reserve chair and, most recently, the geopolitical conflicts in the Middle East. What does this mean for investors? While these narratives have commanded a lot of attention, we see two sides to the story. History tells us that conflicts in the Middle East tend to lead to short-term volatility but not to a long-term correction, unless a recession follows or the Fed is forced to hike interest rates. We think this is quite unlikely. As for the recent tech sell-off, which led to a sharp rotation from technology into other sectors, we view it as somewhat overstated and not entirely negative. Investors are diversifying their portfolios to reduce concentration risk, while tech valuations have also adjusted to more reasonable levels. Notably, although tech stocks have underperformed, they continue to deliver positive earnings surprises. While uncertainty lingers, we remain optimistic, as the world is still full of opportunity. The US economy remains resilient, supported by fiscal spending, investments in AI, electricity-related infrastructure and re-onshoring. Globally, the cyclical outlook is also healthy, with inflation under control and corporate margins close to record highs, particularly in the US. Earnings growth is strong across sectors in the US, while profits are accelerating most rapidly in Asia. Even Europe is benefitting from increased AI adoption. This healthy starting point should allow companies to absorb higher oil prices without major issues. A strategic path to resilient portfolio One thing is clear: the traditional focus on equities and bonds is no longer sufficient to navigate today’s market dynamics. Markets will continue to ask questions about AI, but they will also be driven higher by this rising earnings tide in sectors such as industrials, materials and utilities. The key isn’t to rely solely on technology, particularly the Magnificent 7, but to embrace a broad-based approach in public markets, complemented by income strategies to generate steady returns, as well as gold and alternative assets to enhance diversification. Geographically, we continue to favour the US, while increasingly adding to Asia, which provides stock level diversification at compelling valuations, along with exposure to dynamic growth drivers and a vibrant innovation ecosystem. Some emerging markets have also outperformed as investors look to reduce their US exposure. Consistency in uncertainty Finally, at times of rapid change, we believe it’s important not to be swayed by excessively pessimistic or exuberant narratives. As we write, the conflict in Iran is still ongoing, and markets have seen big gyrations. Staying calm and diversified, with our four investment themes positioned to capture both cyclical and structural opportunities, can help weather headline risks. In this edition, we feature a conversation on disruptive technology and its future with Cathie Wood, Founder, CEO and CIO of ARK Invest, as well as a thought leadership piece exploring strategies to optimise portfolio resilience through identifying emerging investment trends. We hope these insights and our investment themes will help you navigate the months ahead with confidence.. https://www.hsbc.com.my/wealth/insights/market-outlook/investment-outlook/market-outlook-remains-promising-amid-shifting-narratives/

2026-03-10 12:01

Key takeaways Most assets have recently been selling off together, with USD, as well as energy and IT stocks seemingly the only safe havens. Markets were working through the consequences of a risk scenario of high-for-longer oil prices, which could hit growth and boost inflation. While they did not fully price in stagflation, they are relieved at Mr Trump’s declaration that the conflict would “very soon” be over. Yet, the key will be when and how oil will flow through the Strait of Hormuz, which remains unclear and will continue to lead to volatility. While volatility strategies can provide opportunities without taking a directional view, the extreme ups and downs in recent days illustrate the danger of timing decisions and support our preference for building resilient portfolios. For the medium term, we remain of the view that the reduction in concentrated positioning and the lower valuations will help bring back investors when oil starts to pass through the Strait of Hormuz again. AI innovation, investment and oil production should continue to support the US economy. However, managing short-term volatility is clearly key, with a focus on quality and multiple diversifiers. Please refer to the full report for details about the event and our investment view. “Overweight” implies a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Underweight” implies a negative tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Neutral” implies neither a particularly negative nor a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/stagflation-fears-fall-on-hopes-that-conflict-will-end-but-uncertainty-remains/

2026-03-09 12:01

Key takeaways Geopolitical uncertainty is driving divergence across traditional “safe havens”. USD strength persists, but JPY lags while SNB signals it will act to cap CHF strength. In Asia, RMB stability stands out versus regional peers. Given ongoing tensions in the Middle East, the USD’s resilience is unsurprising. In our view, a further rise in oil prices, alongside higher cross-asset volatility, is likely to provide additional support to the USD. Within the traditional “safe haven” complex (Chart 1), the JPY has not yet benefited from heightened geopolitical risk. Meanwhile, the Swiss National Bank’s (SNB) increased readiness to intervene against CHF strength suggests a floor for G10–CHF pairs. SNB Governing Board member Antoine Martin reiterated this stance, stating that “our willingness to intervene, our readiness to intervene, is higher, given the recent political event” (Bloomberg, 4 March). Note: Data as of 5 March 2026 at 20:00 HKT Source: Bloomberg, HSBC Source: Bloomberg, HSBC Among Asian currencies, the RMB has remained relatively stable, down only c0.7% month-to-date vs the USD, outperforming most regional peers (Bloomberg, 5 March). China’s latest government work report has outlined its FX policy priorities for 2026, reaffirming the longstanding objective of maintaining the RMB exchange rate at stable and reasonable levels. Notably, this year’s report places greater emphasis on expanding the use of RMB in cross-border transactions, which is in line with President Xi Jinping’s call for the RMB to become a global reserve currency (FT, 1 February). These priorities, alongside boosting domestic demand, pursuing more balanced trade growth, and upgrading technology, align with the People’s Bank of China’s policy towards gradual diversification away from the USD, reflected in lower USD-CNY fixing rates despite the broader USD rebound (Chart 2). While geopolitics and positioning may drive near-term USD-RMB volatility, steadily lower fixing rates and consistent domestic messaging should help anchor expectations, supporting RMB outperformance vs regional peers even if the USD strengthens further. https://www.hsbc.com.my/wealth/insights/fx-insights/fx-viewpoint/safe-havens-and-rmb-amid-geopolitical-uncertainty/

2026-03-09 12:01

Key takeaways The National People’s Congress has laid out a pragmatic and supportive economic agenda for 2026, anchored by a GDP growth target of 4.5%-5.0% and sustained policy accommodation. The strategic focus is on boosting domestic demand through consumption subsidies, service sector support, structural fiscal reforms and doubling down on technology. The escalating Middle East conflict introduces a tangible external risk, primarily through potential disruption to energy and petrochemical supply chains. As the region is a critical supplier of industrial feedstocks, a prolonged conflict would cascade through downstream industries and accelerate sectoral consolidation. However, the inflationary pass-through to consumers is expected to remain muted. We remain overweight on Chinese equities, focusing on innovation champions and high-quality dividend stocks through our barbell approach. This allows investors to participate in China’s structural growth stories while anchoring portfolios with durable income. The offshore Chinese equity market is more sensitive to global factors, including geopolitical uncertainties. Valuations have become more attractive after the recent weakness. Please refer to the full report for details about the event and our investment view. “Overweight” implies a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Underweight” implies a negative tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Neutral” implies neither a particularly negative nor a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/china-forges-its-economic-agenda-at-npc-while-uncertainty-continues-over-the-middle-east/

2026-03-05 12:01

Key takeaways Markets remain volatile and sentiment is fragile, but there are some tentative signs of stabilisation and bottom fishing too. US markets have remained relatively resilient and European stock markets had a positive day on Wednesday. Asia is rebounding after yesterday’s sell-off, which seems linked to deleveraging rather than new fundamental concerns. Our analysis of current global stability and liquidity risks does not throw up major concerns. And our historical analysis of past oil price spikes suggests that a lasting equity market correction is unlikely, because neither a US recession nor Fed rate hikes are on the cards. Unless our assessment on these two risk factors changes, we would view any volatility as a longer-term opportunity, especially as it follows the recent sell-off in AI. That said, building resilience to weather the short-term news flow is key. Before the conflict started, our concern was that excess oil supply would cap prices and margins, but the conflict has increased risks to supply and transit through the Strait of Hormuz. Even if markets stabilise, oil stocks are a good hedge against higher oil prices. We, therefore, decided to upgrade global energy stocks from underweight to neutral. Please refer to the full report for details about the event and our investment view. “Overweight” implies a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Underweight” implies a negative tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. “Neutral” implies neither a particularly negative nor a positive tilt towards the asset class, within the context of a well-diversified, typically multi-asset portfolio. https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/sell-off-eases-as-markets-remain-orderly-and-investors-aim-for-resilience/

2026-03-03 12:01

Key takeaways Geopolitical events can give confusing signals for currencies, beyond the USD. Tensions in the Middle East may bolster the USD over the near term, especially if oil prices and market volatility increase. But easing tensions could prompt USD weakness, given unchanged underlying fundamentals. The conflict in the Middle East is likely to support the USD over the near term, marking a departure from its performance last June when heightened tensions between the US, Iran, and Israel led to only a brief period of USD strength. At that time, ongoing US policy uncertainty quickly eroded the currency’s gains, prompting debate over the USD’s status as a “safe haven” asset. In our assessment, such discussions could be misleading, as geopolitical events often generate mixed signals for currencies, and the impact on the USD is highly dependent on the broader context of uncertainty. Recent market positioning data indicates that speculative investors are significantly short on the USD, with the latest Commodity Futures Trading Commission (CFTC) figures showing some of the most extreme net short USD positions in recent years. Should oil prices rise sharply and cross-asset volatility increase, the USD could benefit, particularly if there is widespread risk reduction in financial markets. These conditions are typically required for the USD’s “safe haven” characteristics to become more pronounced. Ultimately, oil price movements will play a critical role in determining currency direction. The Strait of Hormuz, which handles approximately 19% of global oil shipments, represents a key point of sensitivity. Any disruption could have a substantial impact on FX markets, especially for major net oil importers (see the chart below). Conversely, a de-escalation of geopolitical tensions would likely see the USD relinquish recent gains, as the underlying factors supporting a softer USD outlook remain unchanged. Source: Bloomberg, HSBC https://www.hsbc.com.my/wealth/insights/fx-insights/fx-viewpoint/usd-middle-east-conflict/