Asset		Tactical view	Commentary
Equities
United States			We are overweight. Policy-driven volatility and supply-side constraints are pressuring growth, but we see AI supporting corporate earnings. U.S. valuations are backed by stronger earnings and profitability relative to other developed markets.
Europe			We are neutral. Greater unity and a pro-growth agenda across Europe could boost activity, yet we are watching how the bloc tackles its structural challenges before turning more optimistic. We note selective opportunities in financials and industries tied to defense and infrastructure spending.
UK			We are neutral. Political stability could improve investor sentiment. Yet an increase in the corporate tax burden could hurt profit margins near term.
Japan			We are overweight given the return of inflation and shareholder-friendly corporate reforms. We prefer unhedged exposures as the yen has tended to strengthen during bouts of market stress.
Emerging markets (EM)			We are neutral. Valuations and domestic policy are supportive. Yet geopolitical tensions and concerns about global growth keep us sidelined for now.
China			We are neutral. Trade policy uncertainty keeps us cautious, and policy stimulus is still limited. We still see structural challenges to China’s growth, including an aging population.
Fixed income
Short U.S. Treasuries			We are neutral. We view short-term Treasuries as akin to cash in our tactical views and we remove this overweight to turn neutral long-term Treasuries.
Long U.S. Treasuries			We are neutral. Yields could fall further as a softening labor market gives the Fed space to cut without its independence being called into question – even if the pressures pushing up yields persist.
Global inflation-linked bonds			We are neutral. We see higher medium-term inflation, but cooling inflation and growth may matter more near term.
Euro area government bonds			We are neutral. Yields are attractive, and term premium has risen closer to our expectations relative to U.S. Treasuries. Peripheral bond yields have converged closer to core yields.
UK gilts			We are neutral. Gilt yields are off their highs, but we expect more market attention on long-term yields through the government’s November budget, given the difficulty it has had implementing spending cuts.
Japanese government bonds			We are underweight. We see room for yields to rise further on Bank of Japan rate hikes and a higher global term premium.
China government bonds			We are neutral. Bonds are supported by looser policy. Yet we find yields more attractive in short-term DM paper.
U.S. agency MBS			We are overweight. We find income in agency MBS compelling and prefer them to U.S. Treasuries for high-quality fixed income exposure.
Short-term IG credit			We are overweight. Short-term bonds better compensate for interest rate risk.
Long-term IG credit			We are underweight. Spreads are tight, so we prefer taking risk in equities. We favor Europe over the U.S.
Global high yield			We are neutral. Spreads are tight, but corporate fundamentals are solid. The total income makes it more attractive than IG.
Asia credit			We are neutral. We don’t find valuations compelling enough to turn more positive.
Emerging hard currency			We are underweight. Spreads to U.S. Treasuries are near historical averages. Trade uncertainty has eased, but we find local currency EM debt more attractive.
Emerging local currency			We are neutral. Debt levels for many EMs have improved, and currencies have held up against trade uncertainty. We prefer countries with higher real interest rates.

Asset	Tactical view	Commentary
Equities
Europe ex UK		We are neutral. Greater unity and a pro-growth agenda across Europe could boost activity, yet the bloc must tackle its structural challenges before we turn more optimistic. We note opportunities in financials and industries tied to defense and infrastructure spending.
Germany		We are neutral. Earnings growth is supportive relative to peers, and increased defense spending could benefit the infrastructure sector. But prolonged geopolitical uncertainty and fading euphoria over China’s stimulus could dent sentiment.
France		We are neutral. Ongoing political uncertainty could weigh on French companies, whose relative earnings have lagged the broader market. Yet major French firms rely on domestic activity for only a small share of their revenues and operations, shielding them from internal weakness.
Italy		We are neutral. Valuations are supportive relative to peers. Yet past growth and earnings outperformance largely stemmed from significant fiscal stimulus in 2022-2023, which is unlikely to be sustained in the coming years.
Spain		We are overweight. Valuations and earnings growth are supportive compared to other euro area stocks. Financials, utilities and infrastructure stocks stand to gain from a strong economic backdrop and advancements in AI. High exposure to emerging markets and easing Fed policy could boost equities further.
Netherlands		We are neutral. The Dutch stock market’s tilt to technology and semiconductors — key beneficiaries of rising AI demand—is offset by less favorable valuations and a weaker earnings outlook compared to European peers.
Switzerland		We are neutral, consistent with our broader European view. Earnings have improved, but valuations remain elevated compared to other European markets. The index’s defensive tilt may offer less support if global risk appetite stays strong.
UK		We are neutral. Political stability could improve investor sentiment. Yet an increase in the corporate tax burden could hurt profit margins near term.

Fixed income
Euro area government bonds		We are neutral. Yields are attractive, and term premium has risen closer to our expectations relative to U.S. Treasuries. Peripheral bond yields have converged closer to core yields.
German bunds		We are neutral. Potential fiscal stimulus and bond issuance could push yields up, but we think market pricing reflects this possibility. Market expectations for near-term policy rates are also aligned with our view.
French OATs		We are neutral. France faces continued challenges from elevated political uncertainty, high budget deficits and slow structural reforms, but these risks already seem priced into OATs and we don’t expect a worsening from here.
Italian BTPs		We are neutral. The spread over German bunds looks tight given its large budget deficits and growing public debt. Domestic factors remain supportive, with growth holding up relative to the rest of the euro area and Italian households showing solid demand to hold BTPs at higher yields. Domestic political pushback likely prevents defense spending from rising to levels that would resurface fiscal stability concerns.
UK gilts		We are neutral. Gilt yields are off their highs, but we expect more market attention on long-term yields through the government’s November budget, given the difficulty it has had implementing spending cuts.
Swiss government bonds		We are neutral. Markets are expecting policy rates to return to negative territory, which we deem unlikely.
European inflation-protected securities		We are neutral. We see higher medium-term inflation, but inflation expectations are firmly anchored. Cooling inflation and uncertain growth may matter more near term.
European investment grade		We are neutral on European investment grade credit, favoring short- to medium-term paper for quality income. We prefer European investment grade over the U.S. Quality-adjusted spreads have tightened significantly relative to the U.S., but they remain wider, and we see potential for further convergence.
European high yield		We are overweight. The income potential is attractive, and we prefer European high yield for its more appealing valuations, higher quality and less sensitivity to interest rate swings compared with the U.S. Spreads adequately compensate for the risk of a potential rise in defaults, in our view.

Weekly market commentary

Mega forces playing out in real time

Trade truce and tech bets shape global dynamics

Our bottom line

Market backdrop

Week ahead

Subscribe to BlackRock's Weekly Commentary

Big calls

Tactical granular views

Euro-denominated tactical granular views

Jean Boivin

Wei Li

Glenn Purves

Devan Nathwani

Explore more at BlackRock