Why Buy US Stocks? As Global Risk Aversion Rises at the End of Summer 2026, US Stocks Become the Only Safe Haven for Hong Kong and Taiwan Capital with Their "Profit Moat"

Introduction: Global Market Fog at the End of Summer 2026

As of August 15, 2026, global capital markets are in a delicate period of "summer restlessness." With the upcoming Jackson Hole Global Central Bank meeting, the battle among investors regarding the Federal Reserve's monetary policy path has reached a fever pitch. For investors in Hong Kong and Taiwan, the current situation is particularly complex: on one hand, local markets are characterized by high volatility due to structural liquidity issues and geopolitical disturbances; on the other hand, growth momentum in other major global economies (such as parts of Europe and emerging markets) shows signs of slowing down.

Against this backdrop, a core question has resurfaced: Why buy US stocks? Although US stock valuations are not cheap after the AI bull market of the past two years, the latest capital flow data and earnings expectations provide a clear answer—US stocks are becoming the "Noah's Ark" for global capital, especially for risk-averse funds from Hong Kong and Taiwan. This article will deeply analyze the irreplaceable nature of US stocks in the current macroeconomic environment based on the latest market dynamics at the end of summer 2026, and explore how Hong Kong and Taiwan funds can utilize this trend for cross-border allocation.

In-Depth Analysis: Why Are US Stocks Still the "Noah's Ark" for Global Assets?

When answering the question of "Why buy US stocks," we cannot merely focus on index fluctuations; we must delve into the underlying logic of the US stock market to find the answer. The US stock market in 2026 is undergoing a profound transformation from "valuation expansion" to "earnings-driven growth."

1. Resilience of Profitability: More Than Just a Valuation Game

Looking back at 2024 to 2025, the rise of US stocks was largely attributed to the increase in valuation multiples of tech giants. However, the situation has changed significantly as we enter 2026. According to the latest earnings expectations for the S&P 500 index, analysts have generally raised their Earnings Per Share (EPS) forecasts for the second half of 2026 and 2027. This upward revision is not blind optimism but is based on the strong pricing power and cost control capabilities of American corporations.

Compared to some markets in Europe and Asia, US listed companies are more mature in their global footprint and are better equipped to withstand economic downturn risks in a single region. For example, in the consumer sector, although domestic consumption growth in the US has slowed, the overseas revenue contribution of leading tech and consumer giants continues to increase, effectively smoothing performance fluctuations. This "profit moat" is the core reason why US stocks attract long-term capital. For investors from Hong Kong and Taiwan, buying US stocks is essentially buying the cash flow of the world's highest-quality assets.

2. The Dual Dividend of the Rate Cut Cycle

The market generally anticipates that the Federal Reserve will officially begin a rate-cutting cycle at the September 2026 monetary policy meeting. This represents a classic "double whammy" moment for US stocks.

• Valuation side: A decrease in the risk-free rate directly increases the present value of future cash flows, benefiting high-valuation growth stocks, especially the large-cap stocks in the Nasdaq index.

Profitability: Interest rate cuts will lower corporate financing costs, especially for Small and Medium-sized Enterprises (SMEs) and interest-sensitive sectors (such as real estate and non-discretionary consumer goods) critical to the US economy, directly stimulating their credit expansion and capital expenditure.

It is worth noting that this dual dividend has not yet been fully priced by the market at this stage. Many investors are still concerned about a "recessionary soft landing," but the latest economic data suggests an increasing probability of a soft landing for the US economy. Once inflation data confirms a downward trend, US stocks are poised for a rally driven by both valuation repair and earnings growth.

Market Trend: From "Crowded Trades" to "Value Return"

Another significant characteristic of the US stock market in 2026 is the broadening of market breadth. Over the past two years, the "Magnificent 7" have accounted for the vast majority of market gains, leading to extremely concentrated trading. However, as the summer market unfolds, we are seeing positive shifts in capital flows.

1. Differentiation and Resilience of the "Magnificent 7"

For the "Magnificent 7," the market is no longer blindly chasing; it is beginning to be selective. As AI infrastructure construction gradually matures, investors are focusing on who can truly translate AI into tangible profits. Giants with a monopoly in cloud computing and software applications remain favored by institutional funds from Hong Kong and Taiwan because they offer stable returns and growth similar to bonds. However, capital is withdrawing from hardware manufacturers who rely solely on concept hype without actual implementation.

2. Neglected Treasures: The Catch-up Logic of Small-Cap Stocks

This is the most compelling new reason for "Why buy US stocks." After a long period of stagnation, the Russell 2000 index showed surprising explosive power in the summer of 2026. There are two core drivers behind this: First, from a valuation perspective, the discount rate of the Russell 2000 index relative to the S&P 500 index is at a historical high, offering a very high margin of safety. Second, as mentioned, the expectation of interest rate cuts is most directly beneficial to small-cap stocks. Funds from Hong Kong and Taiwan have keenly seized this opportunity by buying Russell 2000 ETFs or selecting domestic US consumer and industrial stocks to capture this catch-up dividend. This rotation, from "crowded trades" to "value return," reflects the self-regulating capability of the US stock market and provides an excellent entry point for new capital.

Hong Kong and Taiwan Perspective: Strategic Discipline in Cross-border Allocation

For investors based in Hong Kong and Taiwan, investing in US stocks is not merely about chasing returns; it is a strategic necessity for asset allocation.

1. Hedging Local Market Volatility

In 2026, although the Hong Kong stock market is trading at a historical low valuation, its rebound strength remains weak due to external liquidity constraints and internal economic structural adjustments. Taiwan stocks are highly volatile, influenced by the single industry cycle of semiconductors. Against this backdrop, allocating some assets to US stocks can effectively reduce the overall volatility of a portfolio. US stocks tend to show stronger downside resistance, especially when global risk appetite declines, compared to Hong Kong and Taiwan stocks, which have a lower correlation.

2. Natural Advantages of Exchange Rates and Liquidity

HKD is pegged to the USD, and Taiwan possesses substantial foreign exchange reserves, providing a natural currency advantage for Hong Kong and Taiwanese investors when allocating USD assets. With the expectation that the USD will likely maintain a strong cycle, holding US stock assets not only allows investors to benefit from stock price appreciation but also offers the hedge function of currency stability. Furthermore, the unparalleled liquidity and trading depth of the US stock market ensure exceptionally smooth large-scale capital flows, an advantage that other markets struggle to match. Practical Strategy: How to Position in US Stocks at the Current Time? Based on the analysis above, for Hong Kong and Taiwanese investors, the "Core + Satellite" strategy is recommended for positioning in US stocks at the end of summer 2026, balancing defense and offense. 1. Core Allocation: Securing Long-Term Gains The core positions should be allocated to broad-based indices and leading stocks that have good liquidity and represent the core competitiveness of the US economy. For example, the S&P 500 ETF remains a prime choice, covering the 500 most representative listed companies in the US and capturing the average dividend of US economic growth. Additionally, the Nasdaq 100 index can be allocated to maintain exposure to high elasticity in technology innovation. 2. Satellite Allocation: Seeking Excess Returns Satellite positions can be more flexible, focusing on the following areas: * Biopharmaceuticals: With the aging population and breakthroughs in AI drug discovery, the biopharmaceutical sector is expected to experience a new wave of M&A and product launches in 2026, possessing extremely high explosive potential. * US Finance and Real Estate: Benefiting from interest rate cut expectations, the net interest margin pressure on banks is expected to ease, and the valuation of commercial real estate REITs is also expected to recover. This sector is currently at a historical low and offers high dividend yields. * Consumer Staples: In periods of high economic uncertainty, daily consumer goods companies with strong brand moats and pricing power are natural safe havens. 3. Specific Operational Recommendations Given that the market may experience short-term volatility, it is advised that investors adopt a phased accumulation approach to avoid chasing high prices all at once. Concurrently, utilizing US stock options tools (such as Covered Calls) can enhance holding returns and reduce holding costs. For investors with a lower risk tolerance, Dividend Growth ETFs are a noteworthy option, as they provide stable cash flow while retaining capital appreciation potential. Conclusion On August 15, 2026, as we examine the global market from this vantage point, US stocks continue to shine with configuration value. It is not merely a trading venue, but a concentrated embodiment of global innovation, capital efficiency, and systemic advantages. For investors in Hong Kong and Taiwan, why buy US stocks? Because in an uncertain world, we need a reliable anchor. From the perspective of resilient earnings growth, the benefits of the interest rate cutting cycle, and diversified asset allocation, US stocks play an irreplaceable role. Through scientific strategic positioning, investors can seize rotation opportunities from tech giants to the broader market and are expected to achieve long-term returns that withstand market cycles in the upcoming autumn and winter.