Using a systematic approach to target consistent alpha Not just active, systematic active In decades past, investors have largely relied on information supplied by companies themselves to understand how business conditions and fundamentals were evolving. Financial statements, meetings with management
We enter 2022 with a lot to consider. The paths of inflation and interest rates, the profound effects of megatrends such as digitization and decarbonization and numerous sub-themes all demand our immediate attention. As private market investors we view this
Living with inflation – We expect inflation to be persistent and settle above pre-Covid levels. Central banks should kick off policy rate hikes but remain more tolerant of price pressures, keeping real interest rates historically low and supportive of risk
BII Global outlook We are entering a new market regime unlike any in the past half century: We see another year of positive equity returns coupled with a down year for bonds. The powerful restart of economic activity will be
As U.S. inflation is hitting three-decade highs, market talk has been all about “liftoff:” When will the Federal Reserve and others start raising their policy rates? This is old news in emerging markets (EMs), where many countries have already raised
Weekly commentary: Surging natural gas and coal prices amid a powerful economic restart have exposed a lopsided transition toward low-carbon power. We still see an orderly transition in the medium term – but with bumps on the way that could
The big emerging question Climate change is a global problem: without a successful transition to net-zero everywhere, climate risk is unmanageable anywhere. Emerging markets (EMs) are essential to the global transition – now accounting for 34% of global carbon emissions
BII Global weekly commentary We believe the debt ceiling dispute will eventually resolve but could trigger more volatility. The broadening economic restart keeps us tactically pro-risk. U.S. job growth slowed sharply in September, but we see it as unlikely to
BII Global weekly commentary We stay tactically pro-risk amid the broadening economic restart, with negative real rates supporting risk assets – as per our new nominal theme. The Fed signaled it will start to taper around the year-end. Its reluctance
BII Global weekly commentary Europe is in the spotlight this month, with a key European Central Bank (ECB) meeting and a pivotal German election that could have significant medium-term implications for the fiscal stance of Europe’s largest economy. We see
Portfolio perspectives – August 2021: The volatility we have seen just in the two months since we published our midyear investment outlook reflects – in our view – the unusually wide range of divergent yet plausible economic outcomes that potentially
Slower activity We see last week’s developments in line with China’s long-term hawkish macro policy stance and regulatory clampdown as the country pursues quality growth. This process is not a straight line, and we see a dovish shift in the
We see equities in developed markets (DMs) outside the U.S. as better positioned to capture the …
Systematic Fixed Income Outlook: BlackRock’s quant bond experts tackle some hard questions around the recent inflation data. What is behind the headlines? Are rising prices just temporary or the start of something bigger? What does greater inflation uncertainty mean for
The narrative around China has shifted away markedly, in our view, from concerns about the health of its financial system and credit-fueled growth. Its economic and market outperformance through yet another global shock has brought sharply into focus the important
Oil and industrial metals have rallied since late-2020 on expectations for a swift economic restart, sparking talk of a new commodity “supercycle.” We see a more nuanced outlook – with a divergence across different commodities. The lift for oil from the economic restart is likely to be transitory, while some metals may benefit …
What’s in store for emerging markets? Q1 2021 Outlook Emerging markets experienced a strong recovery both in activity and capital inflows in Q4 2020, supported by intense search for yield and a more optimistic global growth outlook thanks to vaccine
Downgrading government bonds Weekly commentary We broaden our tactical pro-risk stance in light of major developments since the publication of our 2021 outlook in December: the vaccine rollout and up to $2.8 trillion of additional U.S. fiscal spending this year.
A new investment order – 2021 global outlook We have entered a new investment order. The Covid-19 pandemic has accelerated profound shifts in how economies and societies operate. We see transformations across sustainability, inequality, geopolitics and macro policy. This is
"We still like high yield for income. On a tactical horizon, we strongly prefer high yield for its income and more room for spread tightening. We are neutral on IG and underweight emerging market debt."
Weekly commentary The potential outcomes of the November U.S. election could have starkly different policy ramifications, as we argued last week. What will this mean for equity markets? We believe simplistic narratives about the overall market direction are best avoided
Weekly commentary We see a higher inflation regime in the medium term after a decade of inflation persistently undershooting central bank targets. Three new forces are at play: rising global production cost, new central bank policy frameworks that allow for …
Weekly commentary The broad macro backdrop has been improving, risk assets have rallied a long way, and increasing market volatility points to risks that investors will need to navigate as the U.S. presidential election draws closer. All this leaves us …
Weekly commentary Markets have rallied sharply from their virus lows, driven by the policy revolution and economic restart. Tighter valuations increase the risk of volatility, particularly ahead of divisive U.S. elections. Last week’s equity selloff illustrates this. Against …
Weekly commentary The pandemic has sped up key structural trends and triggered substantial market swings, precipitating an urgent need to rethink strategic asset allocations. Among …
Weekly commentary A prolonged period of U.S. dollar gains has reversed abruptly. The policy revolution to cushion the pandemic’s blow is a key driver, as it has eroded the dollar’s interest rate advantage and helped lift risk appetite off its
Weekly commentary Corporate earnings estimates look to be troughing as economies reopen with fits and starts. We have increased our overweight in the quality factor because we see it as most resilient to the dynamics of a choppy activity restart,
The tectonic shift toward sustainability is gaining pace. We highlight an underappreciated climate-related risk to portfolios: water stress. Negotiations have kicked off over the size and make-up of a new U.S. fiscal package as key benefits are set to expire
We consider European stocks the most attractive regional exposure to a multispeed global restart, especially versus emerging markets outside of north Asia. We could see a $1-1.5 trillion U.S. fiscal package that extends some, but not all, federal stimulus measures
An understated risk The global pandemic has reinforced the importance of resilience in investment portfolios. This includes sustainability-related risks that investors may have been underappreciating, ranging from vulnerable global supply chains to health and safety issues. We believe increased asset
Weekly commentary We recently moved to a strategic overweight on credit after being underweight for the past year. Cheaper valuations compensated for the risk of corporate defaults and downgrades in the wake of the Covid-19 pandemic, in our view. We
We downgrade U.S. equities to neutral after a strong run amid surging COVID-19 cases and risks of fading fiscal stimulus. We are tracking the interplay of containment measures and mobility changes on activity as economies have started to reopen. Markets
The world was quickly thrust into a health crisis and economic tailspin that neither individuals nor businesses saw coming. The stress has prompted talk of companies having to reduce or eliminate their dividend payments to preserve operating capital. Tony DeSpirito
The virus shock is accelerating key structural trends. We update our three investment themes and investment views against this backdrop. We are tracking the interplay of containment measures and mobility changes on activity as economies have started to reopen. Markets
2020 midyear outlook The future is running at us. The coronavirus shock is accelerating structural trends in inequality, globalization, macro policy and sustainability. This is fundamentally reshaping the investment landscape …
BII Global weekly commentary We are warming up to European assets as the region steps up its policy response and demonstrates relative success in tamping virus growth. We are tracking the interplay of containment measures and mobility changes on activity
We see diversification with – and within – private markets as crucial to building resilient portfolios in a low-rate, post Covid-19 world. The key to the policy response has shifted to ensuring successful execution and avoiding policy fatigue before the
Macroeconomic policy has undergone a necessary revolution in just three months, but this is a slippery slope without proper guardrails. The key to the policy response has shifted to ensuring successful execution and avoiding policy fatigue before the shock passes.
The great poet Ralph Waldo Emerson famously wrote, “Do what we can, summer will have its flies.” As we head into the summer months, this mood may best describe nervous investors who recently experienced large bouts of market volatility due
From unconventional monetary policy to unprecedented policy coordination Unprecedented policies will be needed to respond to the next economic downturn. Monetary policy is almost exhausted as global interest rates plunge towards zero or below. Fiscal policy on its own will
Investing without a parachute In the wake of the coronavirus crisis, the U.S. bond market finds itself flirting with negative interest rates and bumping up against the “zero lower bound”—calling into question the ability of bonds to provide ballast in
China’s economy is restarting after emerging from lockdown, likely benefiting countries and assets exposed to its growth. The key to the policy response has shifted to ensuring successful execution and avoiding policy fatigue before the shock passes. Markets will watch
BII Global weekly commentary The virus shock is accelerating and changing structural trends, leading us to shift our long-term return expectations and strategic views. The key to the policy response has shifted to ensuring successful execution and avoiding policy fatigue
Treasury Market Dislocations This past month market volatility and risk premiums rose to levels not seen since the global financial crisis of 2008- 2009. Sparked by a global collapse in activity in response to the Coronavirus pandemic, the increase in
Weekly commentary Global stocks have recovered more than half of the selloff triggered by the coronavirus pandemic since late March – alongside a sharp contraction in economic activity and corporate earnings. We see the unprecedented policy …
Weekly commentary A decision by the German constitutional court last week could potentially undermine the independence of the European Central Bank (ECB) – and threaten to fuel fragmentation within the euro area in the long run. This comes as the
2020 investment themes update Activity standstill – The coronavirus shock is sharper than what we saw in 2008 – but we believe its cumulative hit to growth is likely to be lower. The main risk to our view: policy needed
The coronavirus shock has triggered market turbulence over the last three months – and prompted historic policy actions globally. Does this represent a need and opportunity for long-term investors to adjust their strategic allocations – or the broad mix of
Weekly commentary The coronavirus shock has triggered market turbulence over the last three months. Does this represent a need and opportunity for long-term investors to adjust their strategic allocations? We think so – based on price dislocations alone and when
Abstract: COVID-19 has prompted a wide range of responses from governments around the world. There is a pressing need for up-to-date policy information as these responses proliferate, and governments weigh decisions about the stringency of their policies against other concerns.
