Corporate earnings and resilient U.S. growth are shaping portfolio decisions for the second half of 2026. Investors are also weighing the effects of persistent inflation, fiscal concerns and evolving AI investment.
BNN Bloomberg spoke with Jeanne Sun, head of portfolio advisory at Citi Wealth, about managing risk and identifying durable opportunities across asset classes.
Key Takeaways
- U.S. large-cap equities offer greater earnings resilience and visibility into future growth than other areas of the equity space.
- Technology earnings could provide insight into whether companies remain committed to AI capital spending and can generate returns on those investments.
- Cybersecurity spending is expected to grow as AI models become faster and more capable, supporting a multiyear investment theme.
- Sticky inflation, fiscal concerns and strong U.S. growth create upside risk for long-term interest rates, favouring shorter-duration fixed income.
- Gold can provide portfolio diversification as long-term U.S. Treasuries become less reliable as a buffer against equity volatility.
Read the full transcript below:
ROGER: Well, earnings season is picking up, with some major U.S. banks reporting results yesterday and into today, and more companies are set to follow. Investors, of course, looking to the second half of 2026, and a new report from Citi says it’s important to stay selective when positioning a portfolio. Let’s get more now from Jeanne Sun, head of portfolio advisory at Citi Wealth. Jeanne, thanks very much for joining us.
JEANNE: Thank you so much for having me. It’s great to be here.
ROGER: Okay, we’re starting earnings season, seeing some numbers. The banks — a lot of the banks. Your thoughts on how things are shaping up overall?
JEANNE: Yeah, for us, we have our North Star with earnings and fundamentals. And so, what we’re seeing so far continues to support the view that, as you have said, we want to stay fully invested within portfolios, but we also want to be mindful of risk and mindful of the positioning and where there might be some vulnerabilities.
And so, for us, when we think about our portfolio positioning, where we’ve been most comfortable, especially in equities, has been U.S. large-cap, where earnings have been resilient. There’s been the greatest visibility into where growth is coming from. You’ve mentioned banks, which we have started off earnings season with, and so kind of a lot of validation in what we’re seeing in actual earnings.
But, of course, there’s a long way to go in earnings season, and one of the big drivers has been coming from secular growth, AI. And so, we’ll be watching really closely for continued language around, you know, just the commitment to AI capex and also where those drivers are coming from. But, for us, that’s where we can reduce some of the, you know, whether it’s cyclical or even, like, geopolitical risk vulnerabilities. Like, those areas are where we’re seeing the strongest strength coming from and sources of strength for earnings.
ROGER: All right, with tech stocks, when they start reporting their earnings, what might be some warning bells you’ll be looking for?
JEANNE: Yeah, for us, it’s going to come down to just how we’re thinking, how companies are guiding toward, you know, the capex outlooks, whether or not we’re getting the continued, you know, commitments really to just investing in this space.
I would also highlight that one of the other themes that we talked about in our third-quarter piece was also just the continued evolution of what this growth is looking like for AI investment. So, there’s been a lot of focus on whether or not there’s going to be revenues and ROI coming out of the investments being made, but every investment dollar being put to work, whether it’s from hyperscalers or others, is someone else’s revenues.
And we’ve been talking about, as a team, over time, where that’s been benefiting other parts of the market, whether it’s been in chips and memory. But the one that we wanted to call out this quarter was around cybersecurity. And, of course, cyber’s had a nice run recently, and valuations are a little bit higher relative to the software sector as a whole.
But because of the developments in AI, the continued investment in cyber is going to be another extension of where we see investments related to kind of, like, how AI is developing over time. And so, for us, that’s another theme that we wanted to highlight in the third quarter, but also just more broadly for us, this is more of a multiyear theme because right now, as we’ve seen, kind of, like, where IT spend has gone, capex has been — or cyber has been — growing as a part of IT spend. And we expect that to continue, particularly as AI models become faster and better over time.
ROGER: Okay, and in fixed income, you continue to be underweight. What’s driving you there?
JEANNE: For us, it’s the sense that correlations, historical correlations of fixed income to equities, have actually broken down a little bit. And so, when we look at where some of the volatility is coming from, it’s been more on the rates side. And because inflation continues to remain sticky — I know we got a more benign report this week, both today as well as yesterday — but it’s still higher than what central bank targets are allowing for, and this is across the globe.
It’s also that there have been concerns about fiscal discipline, and just, especially in the U.S., growth remains pretty strong. And so, we have a combination of these things, which leads us to have risks to the upside when it comes to rates, particularly on the long end.
So, we want to stay a little bit shorter duration in our portfolios, but then you couple that with where credit spreads are, and they’re incredibly tight in a historical context. So, when we take all of that together, what we wanted to do is make sure that our portfolios were working as a whole, and that led us to a position where Treasuries and fixed income aren’t playing the same sort of ballast and protective role that they might have in the past.
And so, what we did last year, actually, was add a position in gold to add additional diversification. And I saw that you had a commodities conversation earlier. You know, that’s one of the things that we also highlighted in this piece, is just: Where are you getting your diversification from?
In a historical context, there was kind of, like, that fixed income-equities balance. Today, we want to be more thoughtful in thinking through where we are in the cycle and where a prudent investor might add more diversification by adding a newer asset class or something that helps the overall portfolio correlations.
ROGER: All right, and with gold, are you looking at gold itself or stocks?
JEANNE: Looking at gold itself because I think what we want to do is really focus on the purest play and where those corollary benefits come from. But in that regard, you know, I will call out it’s a relatively smaller position in portfolios. It’s just part of it is to replace what typically was a role played by long-duration Treasuries.
ROGER: All right, but for now, though, gold is going to take that. Where do you see gold going?
JEANNE: You know, for us, that’s not been the primary reason. There’s certainly benefit from continued buying by central banks. We see, especially with the pullback that we’ve seen recently, there’s been a cleansing, perhaps, of positioning, and so there is more potential upside.
But again, the view for us hasn’t been really predicated on a forecast per se. It’s been around the portfolio benefits and the correlation benefits that gold, as a position within a multi-asset portfolio, can provide, and that ballast in the face of a lot of uncertainties, particularly with inflation running higher than trend.
ROGER: Okay, we’ll leave it there, Jeanne. But thank you very much for joining us.
JEANNE: Thank you so much for having me.
ROGER: Jeanne Sun, head of portfolio advisory at Citi Wealth.
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This BNN Bloomberg summary and transcript of the July 15, 2026 interview with Jeanne Sun are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
