Market view May 2026 - The last word is never said

We have chosen not to make significant changes to the portfolio in the last month as the chance of making mistakes is high when there are so many fluctuations. Nevertheless, we have increased our overweight in the technology sector and reduced industrial stocks. At the beginning of May, we are taking industrial stocks one step further down and underweighting them. We are overweighting healthcare and energy stocks in addition to technology. We have chosen to keep the bond portfolio unchanged.

Oil and the Strait of Hormuz

There has been no shortage of headlines in April related to the Strait of Hormuz and the conflict in the Middle East. From declaring it fully open to it being practically closed like now. For now, there is no solution to the conflict, and by the end of April, the price of oil has risen again and is around 115 dollars per barrel (for delivery in June). Looking at global oil consumption, it has steadily increased over the last 20 years by a little over one percent per year and is now about 100 million barrels per day. The only time it has fallen, aside from the pandemic, was during the financial crisis of 2008-2009. The decline was a modest two million barrels per day.

Now it is estimated that there is a shortfall of about 10 million barrels per day. So significantly more. At the same time, we know that demand is not very sensitive to changes in price. In other words, a significant increase in price is necessary to clear that supply has fallen. Many suggest that we need to go up to 150 dollars per barrel for such a clearing. We do not currently assume that we will get there, but the chance of it dragging out has increased and that oil prices will remain high longer. Therefore, we are overweighting energy stocks.

Development in oil consumption

Technology – versus industrial stocks

In 2025 and early 2026, we saw that the rise in the stock market spread to several sectors and was no longer so dominated by the technology sector. But at the same time, earnings development has continued to be clearly best for technology stocks. This makes the price-to-earnings (P/E) ratio more favorable for this type of stock. Looking at industrial stocks, we get a contrary picture. They have had relatively weaker earnings development but performed very well until the war between the USA and Iran started. The price/earnings ratio became less favorable for the sector. At the same time, we know that energy is an important input factor for several industrial stocks. This also makes them less interesting. In the portfolios, we have therefore overweighted technology stocks at the expense of industry.

Returns by sector so far this year

Healthcare to overweight

We reduced the healthcare sector to underweight early this winter. It has been favorable since the sector has developed weakly since that time. Looking at April in isolation, healthcare stocks were almost 10 percent weaker than the broad market. It is not often there are such large differences without us being able to point to a specific reason. At the same time, we know that healthcare stocks have characteristics that are useful when the market is weak. They can stabilize returns. Therefore, we are overweighting healthcare again. We could also have chosen other defensive sectors, but among these, healthcare appears to be the most attractive.

Matrix May 2026

We have not made significant changes to the bond portfolio. This means that it is still overweighted in bonds and credit at the expense of the money market. At an overarching level, we maintain equities close to neutral weight. If we only considered geopolitics and uncertainty related to oil prices, we would have chosen underweight. However, particularly the American economy seems to be resilient while companies are delivering good results. The changes we have made in the equity portfolio, which we have described above, also show in the matrix below.