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The economic restart is real and it is broadening out globally, but what comes next?  

 

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Title: 2021 midyear outlook: Looking beyond the restart  

 

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Wei Li 

Global Chief Investment Strategist for BlackRock 

 

Our first theme for the rest of 2021 is what we call the new nominal, where we expect higher inflation in the medium term as a result of a more muted monetary policy response to inflation than in the past.  

 

We’re turning even more positive on European equities and upgrading Japanese equities to neutral.  We are moderating our view on the U.S. equities to neutral.  

 

Our second theme is China stands out. Chinese assets play a key role in an increasingly bifurcated U.S.-China world and they need to be considered as a stand-alone asset allocations. The quality revolution in China, putting the quality of growth over the quantity of growth makes us tactically neutral on Chinese equities, but strategically overweight.  

 

Our third theme is the net-zero journey. Our journey to net zero, in terms of carbon emission, has a clear starting point and a destination, but there’s no road map and we see many zig-zags along the way. We’ve overweight, the tech sector, as better positioned for the green transition.  

 

The bottom line is as the economic restart broadens out, we remain pro-risk, even though the path for risk assets for push higher is getting narrower.

2021 midyear outlook: Looking beyond the restart

What comes after the economic restart? We see three themes for markets shaping the remainder of the year. Watch Wei Li, Global Chief Investment Strategist, explain on this episode of BlackRock Bottom Line.

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