Portfolio manager market views and asset allocation insights

Let’s give it a shot.

Good morning. I’m Jeff Rosenberg, Senior Fixed Income Portfolio Manager for BlackRock Systematic. It’s the week of August 10th. Here are three things you need to know, and one you don’t.

First up…

We've got some important data coming out this week highlighted by Wednesday's July CPI release. We’re in a new era where there’s less forward guidance, and that means more reliance on our own assessments. Some of the things we’re seeing out of our alternative data. Web-scaped inflation data showing some uptick. That should align with the headline inflation. But, some of the interesting things we’re seeing out of wage inflation, with a little bit of uptick from lower wage earners, and a shift between goods and services. We’ve seen some important recent declines with the inflation outlook. Some of this alternative data may show a different perspective on whether that continues and that’s something that we’ll keep an eye out for.

Next Up…

AI is the macro story, and the micro story. In the micro space, we see it in terms of the differentiation between AI winners and AI losers, but it's not just a technology story. We're seeing this across utilities, industrials and that differentiation between winners and losers, creates a tremendous opportunity to add alpha into your portfolios. It’s long/short market-neutral investing. Being on both sides of the trade takes out the market beta exposure and unlocks that alpha opportunity.

Which brings us to…

July’s market performance highlights the need for alternative forms of diversification. This was a market where we saw negative returns from stocks and negative returns from bonds. Bonds are no longer providing that traditional diversification that you expect from fixed income. So taking on strategies that use liquid alternatives can deliver a form of diversifying alpha as an alternative to traditional bond
diversification.

And the one thing you don’t need to know…

I just finished a recent triathlon. Here's my finisher medal. I’ve done triathlons for a number of years and what I notice about them is they’re a bunch of former marathoner’s, because you can do them a lot longer. That's why triathlons are better than marathons, because running those 26.2 miles that’s killer.

To get more three plus one and stay up on everything you need to know… And some things you don't, make sure to follow us on LinkedIn and YouTube. We'll see you next week.

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