QUESTION OF THE WEEK

What's your market outlook?

Every other week, we ask for your thoughts on a top question our portfolio managers and strategists are debating. We share the final poll results and insights.

    This year has been marked by significant differentiation in market performance, both between asset classes and within, unlike last year's unusually synchronized bull market in virtually every asset class.

    What most resembles your market outlook for the rest of the year?

            Poll results: What's your market outlook for the rest of the year?

            Source: Blackrock Investment Institute, with data from SurveyMonkey. Note: Data does not include results from BlackRock social media polls.

            Almost 40% of respondents to our public poll chose “risk-on,” with the view that stock prices will continue to rise for the remainder of 2021. Close behind, more than one-fourth of responses predicted that cyclicals, such as energy and financials, will prevail as market winners. Next up: “growth (tech) favored” (21%) and “yields up = stocks down” (13%).

            How does this compare with the market outlook of BlackRock portfolio managers for the rest of the year? Responses to a similar internal poll showed three main camps: 

            1. those seeing cyclicals outperforming further (32%);
            2. those anticipating a broad “risk-on” rally thanks to ample liquidity and the looming economic restart (23%), and; 
            3. those expecting high-quality, growth stocks to lead markets (20%).

            Varying performance

            One clear market trend has been value’s recent outperformance over growth after years of playing the laggard. One quant investor argued that recent performance has shown how the death of value may have been exaggerated. At the same time, structural growers could become market leaders again as powerful top-line performance and durable profit margins draw in investors, another portfolio manager argued.

            BlackRock's Multi-Asset Strategies & Solutions group believe sequential growth in the U.S. may be peaking, and this likely warrants a fine-tuning of broader risk-on exposures. Others saw a shift in consensus views as the biggest risk, particularly relating to strong growth, liquidity pushing risk assets higher and the cyclical rotation.

            Elevated risk sentiment  

            The BlackRock Investment Institute (BII) sees the accelerated restart and the Fed’s new policy approach underpinning its pro-risk stance and tilt into cyclicality. BII’s latest analysis shows risk sentiment stayed elevated at the end of the first quarter in 2021.

            Which markets have moved most? Explore the interactive BlackRock return map to see rankings from best to worst asset classes so far this year. A hint: the commodity price boom underway has been top of mind. Does this rally have legs? BII explores the outlook for energy and industrial materials – and the implications of a “green” transition for commodity prices – in the latest Global weekly commentary

            Stay ahead of markets with the latest insights from the BlackRock Investment Institute.

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