The Chief Investment Office (CIO) of Standard Chartered Bank released its global market outlook for the fourth quarter of 2026, believing that as market volatility increases, corporate profits will ultimately dominate the market. Standard Chartered Bank expects corporate profits to maintain growth, which is expected to support stock market performance and investment confidence; however, if oil prices continue to rise, it may push up inflationary pressure again and become the most noteworthy cross-asset risk indicator in the fourth quarter.
Standard Chartered Bank pointed out that AI investment and corporate capital expenditures continue to drive the global economy, and a soft landing is still regarded as the baseline scenario. However, if oil prices remain high, they may push up inflation and increase market doubts about the economic outlook. The Federal Reserve, the European Central Bank and the Bank of Japan are still likely to further tighten monetary policy, and policy uncertainty caused by the U.S. midterm elections may also affect market sentiment and capital flows. In the face of rising volatility, investors are advised to maintain discipline and improve portfolio resilience through cross-asset allocation.
Standard Chartered Bank pointed out that as corporate profits continue to grow, Standard Chartered remains relatively optimistic about the U.S. and Asian (excluding Japan) stock markets. Among them, Taiwan has a key position in the global AI supply chain, with relatively high visibility of corporate profits and industry growth. It is a market that Standard Chartered continues to be relatively optimistic about in the Asian region.
The AI investment theme continues to extend from the technology industry to the real economy. In addition to semiconductors and other industries well-known to investors, which continue to benefit, as the demand for AI computing increases rapidly, the importance of power supply, power grid upgrades and electrification has simultaneously increased, and related industries deserve continued attention.
In terms of U.S. stock industry allocation, we continue to be optimistic about technology and communication services stocks; active financial market activities and steady corporate capital expenditures are also beneficial to the fundamentals of financial and raw materials stocks. Although interest rate trends, oil price fluctuations and the U.S. midterm elections may disrupt market sentiment, corporate profits are still the core factor that determines the mid- to long-term direction of the stock market. In the face of an increasingly volatile environment, it is advisable to seize investment opportunities through batch layout and regional diversification.
Standard Chartered is relatively optimistic about emerging market U.S. dollar government bonds, while mature market government bonds maintain a cautious view due to higher risks of yield fluctuations. In terms of corporate bonds, both investment grade and non-investment grade bonds can provide relatively stable sources of income.
With major central banks maintaining a tightening stance, long-term bonds may still be affected by interest rate fluctuations, and 3- to 7-year bonds are preferred in terms of allocation to balance income opportunities and interest rate risks. At present, corporate fundamentals are still generally sound, but credit spreads are narrow. Bond investment strategies should focus on stabilizing coupon income, while strengthening issuer screening and diversified allocation to enhance the defensive capabilities of the investment portfolio.
In terms of gold, Standard Chartered Bank maintains a bullish view and maintains its 3-month and 12-month target prices at US$4,750 and US$5,000 per ounce respectively. The U.S. dollar is likely to weaken in the medium term, and emerging market central banks continue to increase gold reserves, which is expected to provide support for gold prices.
In terms of foreign exchange, if the Federal Reserve further tightens monetary policy, it is expected to support the U.S. dollar in the short term. Standard Chartered Bank's current three-month U.S. dollar index forecast is 100.2; as the impact of oil prices and tariffs gradually subsides, inflationary pressure eases, and the European Central Bank and the Bank of Japan further tighten policies, the U.S. dollar index is expected to gradually fall back to 98 in the next 12 months. In terms of the yen, if the Bank of Japan continues to normalize monetary policy and the interest rate differential between the United States and Japan gradually converges, it is expected to provide support for the mid-term trend of the yen.
In terms of crude oil, due to the risk of geopolitics and supply disruptions, Standard Chartered Bank raised its three-month price forecast for West Texas crude oil to US$100 per barrel, and simultaneously raised its 12-month target price to US$80 per barrel. Short-term supply uncertainty may keep oil prices high, but judging from inflation-adjusted real energy prices and the declining oil intensity of the global economy, oil prices have not yet reached the level of typical energy shocks in history. However, if oil prices rise sharply further, it may still push up inflation and increase the risk of economic downside. It is expected that if the nominal oil price rises to the range of 120 to 150 US dollars per barrel, the impact on global growth and inflation may increase significantly.
Looking forward to the fourth quarter, Standard Chartered Bank believes that as rising oil prices and economic growth resilience continue to struggle, a soft landing is still expected to be the base scenario with the highest probability, with a probability of 45%; the probability of no landing and downward scenarios are 30% and 25% respectively. While corporate earnings growth remains strong, Standard Chartered Bank still prefers stocks to bonds while managing market volatility through multi-asset allocation.
