12 Dec 2013

BlackRock Investment Institute

We are living in a low-growth world that is slowly returning to normalcy—if we are lucky. We expect US GDP growth to come in around 2.5% as the impact of tax hikes and spending cuts fades. We see the Eurozone growing—but not enough to reduce debt loads. A slowing China is still set to be a major contributor to global growth (financial sector risks are its weak link). We are split on whether Japan’s growth plan will work. The good news: Developed economies should accelerate in tandem for the first time since 2010.

Our worry: Global central banks may be pushing on a string. Low nominal growth cannot be solved by monetary policy alone. ‘Mquantity’ (monetary growth) does not address skills mismatches, ageing populations, labor market red tape and protectionist policies. Central banks can ease some of the pain—but ultimately policymakers must deliver structural reforms to boost growth.

In view of a backdrop of low nominal growth and markets driven by monetary policy choices, we are introducing three new investment scenarios for 2014.

 

2014 Market Scenarios

Issued in Hong Kong by BlackRock (Hong Kong) Limited. This material has not been reviewed by the Securities and Futures Commission. Investment involves risks. Past performance is not a guide to future performance. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Any opinions contained herein, which reflect our judgment at this date, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. This material is for informational purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock fund and has not been prepared in connection with any such offer. Any research in this material has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. BlackRock® are registered trademarks of BlackRock, Inc. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. ©2013 BlackRock Inc. All rights reserved.