BlackRock Investment Institute Videos

Market take

Weekly video_20260105

Natalie Gill

Portfolio Strategist, BlackRock Investment Institute

Opening frame: What’s driving markets? Market take

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Three main lessons stand out: immutable economic laws limit policy extremes, mega forces – especially AI – overshadow traditional macro anchors, and the rise of tokenized assets show a fast-changing financial system.

Title slide: Three investment lessons for 2026

1: World can’t change fast

U.S. stocks held up in what turned out to be an eventful year. The April 2nd tariff announcement triggered the S&P 500’s worst week since the pandemic, yet equities still ended the year with double-digit gains. Government bonds also delivered as yields fell despite some fiscal worries and persistent inflation.

A softer dollar and Federal Reserve policy easing helped boost international stocks. Gold surged about 60% as investors rethought what diversification means in this new market regime, and the AI buildout accounted for roughly half of U.S. GDP growth.

We think the resilience of the U.S. economy stems in part from our first lesson: immutable economic laws mean the world can’t change quickly. We saw this play out in real-time as policy uncertainty weighed on investors, until one of these immutable laws – supply chains can’t be rewired overnight – prevented the maximal stance on tariffs and helped stocks recover.

2: Mega forces trump the macro

Recession fears were front and center at the beginning of the year. Yet growth stayed resilient because mega forces – led by AI – outweighed the macro backdrop. The macro anchors that helped guide investors for decades, such as stable inflation and fiscal discipline, have weakened.

In this environment, there is no ''neutral'' portfolio allocation. We think investors should focus more on owning risk deliberately instead of spreading it indiscriminately. That means owning a view on AI winners and losers and seeking unique return sources – like private markets and hedge funds.

3: Future of finance rapidly evolving

The future of finance mega force is evolving faster than expected as stablecoin adoption and the tokenization of assets rise. The 2025 Genius Act provides the first U.S. legislation for stablecoins but bars interest payments - though a ''marketing-rewards'' provision allows for yield-like incentives. This could allow for competition with bank deposits and money market funds.

Outro: Here’s our Market take
2025 was a year that pushed limits on multiple fronts, from the constraints of trade policy early in the year to the advancement of the AI theme. We plan to keep tracking this theme into the new year and stay risk-on.

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.