The BlackRock Investment Institute is maintaining its “risk-on” investment stance, remaining overweight in U.S. equities despite acknowledging that core inflation is proving sticky.
What Is Driving BlackRock’s Positive Outlook On Equities?
The firm cites a softening labor market, which is expected to give the Federal Reserve justification to resume cutting interest rates this week, and the powerful artificial intelligence (AI) theme as key drivers for its positive outlook.
BlackRock’s base case scenario hinges on the cooling jobs market, as the firm believes the Fed’s monetary easing will bolster equities even as economic growth slows.
“A softening labor market gives the Fed space to cut, helping ease brewing political tensions from higher interest rates,” the weekly commentary notes. This environment, characterized by slowing activity without a recession, is seen as …