BlackRock Investment Institute Videos

­Market take

Weekly video_20241014

Ben Powell

Opening frame: What’s driving markets? Market take

Camera frame

The recent surge in Chinese equities shows the benefits of investing in global stocks.

Title slide: Our conviction in global stocks

1: The case for going global

We still like U.S. stocks and the broad AI theme as corporate earnings growth expands beyond tech. Yet valuation concerns can drive market volatility.

This calls for adding global exposure where we see attractive relative valuations and where catalysts emerge. But selectivity is key.

2: Seizing opportunities

Signals for major fiscal policy stimulus on the way in China gave us room to turn modestly overweight Chinese stocks. That doesn’t change the long-term, structural challenges we are concerned about.

We stay overweight Japanese stocks. The macro outlook is brightening and corporate reforms are driving improved corporate earnings and shareholder returns.

We are overweight UK stocks but have less conviction as the economy stagnates and heading into the new government’s budget announcement.

3: Signposts for change

We lean into risk yet monitor signposts that could cause market volatility, such as escalating geopolitical tensions and uncertainty over the U.S. presidential election.

We see mega forces driving regional opportunities and risks that span beyond the very near term.

Outro: Here’s our Market take

We stay overweight U.S. stocks as the artificial intelligence theme broadens out.

Outside the U.S., we lean into high-conviction ideas, such as in Japanese and Chinese stocks.

Closing frame: Read details: blackrock.com/weekly-commentary

BlackRock Bottom Line: 2024 Global outlook

Speaker: Wei Li, Global Chief Investment Strategist, BlackRock Investment Institute

Script:

Higher interest rates and greater volatility define the new regime we’re in. In turn, that’s creating greater dispersion of returns.

We think investors will benefit from taking a more active approach to portfolios as we head into next year. 

Here’s our three investment themes for 2024: number one, managing macro risk; number two, steering portfolio outcomes; and number three, harnessing mega forces.

BlackRock Bottom Line open

Title: BlackRock Investment Institute 2024 global outlook

Our first theme is managing macro risk. Production constraints mean central banks face tougher trade-offs between inflation and growth – they can’t respond to faltering growth like before. This leads to a wider set of outcomes and a more uncertain macro outlook.

We don’t think investors should wait for the macro environment to improve. Instead, they should look to neutralize macro exposures or be very deliberate about which risks they take.

Our second theme is steering portfolio outcomes. We believe the new regime rewards an active approach to portfolios. Greater volatility and dispersion of returns create space for investment expertise to shine – that involves being more dynamic with indexing and alpha-seeking strategies, while staying selective.

Our third theme is harnessing mega forces. We see five structural shifts reshaping markets and driving returns now and in the future. We think they have become important portfolio building blocks on their own.

The bottom line is: Going into 2024 in the new regime, we want to put money to work. We believe investors should take a more active approach to their portfolios and be deliberate in taking portfolio risk.