BlackRock Investment Institute Videos

Weekly video_20260504
Natalie Gill
Senior Portfolio Strategist
BlackRock Investment Institute

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CAPITAL AT RISK. MARKETING MATERIAL.

Opening frame: What’s driving markets? Market take

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Title slide: Earnings strength keeps us risk-on

U.S. stocks are near record highs, supported by solid corporate earnings that are being revised higher. That, plus the ongoing AI buildout, reinforce our pro-risk stance.

1. Earnings momentum builds

2026 earnings have been revised upwards throughout this year. That’s an unusual pattern, as estimates are often revised down over time.

Mega cap tech remains the dominant driver, with the 'magnificent seven' stocks accounting for over a third of total expected earnings growth for this year.

The broader earnings backdrop also looks healthy. Energy and materials have seen earnings upgrades, largely due to higher prices caused by the Middle East conflict.

2. AI drives differentiation

Mega forces are increasingly driving investment outcomes – especially AI. Markets are focusing on which companies can turn heavy investment into profits. That dynamic was on full display last week amid a flurry of Big Tech earnings. These firms are raising already record-high capex plans, and investors are rewarding those with clear returns on investment or control over key technologies.

This surge in spending is lifting demand for semiconductors and hardware, especially in parts of Asia.

3. Beyond the key AI players

Active investors can also find opportunities beyond the main players in the AI buildout. Examples include early AI adopters across financials and selected healthcare, in our view. Other potential beneficiaries include value and high dividend stocks, where wide discounts and attractive income could drive valuations higher.

Outro: Here’s our Market take

Strong corporate earnings and the AI buildout reinforce our pro-risk stance. We stay overweight U.S. and emerging market equities on the ongoing AI theme, and we like thematic opportunities across infrastructure, defense and energy.

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

BlackRock Bottom Line: 2024 Global outlook

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

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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.