Cybercrime is evolving at a fast pace, and one of the most dangerous trends is the rise of deepfakes. These are audio and video files generated by artificial intelligence to convincingly mimic real people. Fraudsters use this technology to impersonate trusted figures such as company executives or family members, creating scenarios that pressure victims into transferring money or revealing sensitive banking details.
Deepfake scams often take the form of CEO fraud, where criminals pose as senior executives and instruct employees to make urgent payments. A recent example involved Ferrari, where scammers used AI-generated audio to imitate the CEO’s voice with the aim of tricking staff into authorising fraudulent transfers. Another common tactic is the so-called family emergency scam, where criminals pretend to be a relative in distress, asking for immediate financial help. These attacks exploit trust and urgency, making victims act before they have time to think.
Spotting a deepfake can be challenging because the technology is designed to look and sound authentic. However, there are subtle signs that something is wrong. Speech may sound slightly unnatural, with odd pauses or robotic tones. Video may show lip movements that do not perfectly match the words being spoken. Often, the message will carry an unusual sense of urgency, demanding immediate action and discouraging verification. These psychological triggers are deliberate, aiming to override caution.
The best defence is verification. Never rely solely on the communication you receive, no matter how convincing it appears. If you receive an urgent request for a payment or sensitive information, pause and confirm through official channels such as a known phone number or email address. Do not use the contact details provided in the suspicious message. For businesses, implementing multi-step approval processes for financial transactions can significantly reduce risk. For individuals, staying informed about emerging scams and discussing them with family members can prevent panic-driven decisions.
If you suspect a deepfake scam, stop immediately and report it to your bank and the relevant authorities. Acting quickly can limit damage and help prevent others from falling victim. Deepfakes are a real and growing threat to your financial security and awareness and vigilance are your strongest protection.
Wei Li – Global Chief Investment strategist together with Bruno Rovelli Chief Investment Strategist for Italy and Natalie Gill – Portfolio Strategist, all forming part of the BlackRock Investment Institute and Carrie King – Global Chief Investment Officer, Fundamental Equities of BlackRock share their insights on global economy, markets and geopolitics. Their views are theirs alone and are not intended to be construed as investment advice.
Key Points
More resilience : U.S. corporate earnings strength is broadening. Earnings resilience and mega forces like AI keep us overweight U.S. stocks.
Market backdrop : The S&P 500 kicked off the new year on a positive note to reach a record high. U.S. Treasury yields were steady, while gold pushed back near all-time highs.
Week ahead : The December U.S. CPI will provide a clean read of the inflation picture after the government shutdown disruptions.
Solid U.S. economic growth and Federal Reserve rate cuts have boosted corporate earnings and profit margins, lifting U.S. stocks and underpinning our overweight. We think this will keep playing out in Q4 earnings results starting this week. We see three themes: a further narrowing of the earnings gap between the “magnificent seven” stocks and other sectors; mega forces supporting cyclical sectors; and AI-led productivity gains potentially offsetting typical earnings downgrades.
The U.S. corporate earnings season is key after the S&P 500 posted a third straight year of double-digit returns in 2025, while international markets from Spain to South Korea also delivered strong results. The AI buildout and easing tariff concerns kept economic growth resilient, helping U.S. earnings beat expectations in the third quarter, as we expected. We think earnings can keep delivering, partly as the U.S. stocks driving earnings growth broaden out. The gap between the magnificent seven mega cap stocks like Nvidia and the rest of the S&P 500 is narrowing as the other 493 see earnings improve – the first theme we’re watching. See the chart. Yet the magnificent seven are still delivering strong earnings growth – and have consistently beat expectations in recent years, according to Bloomberg data, so that gap may not narrow as much as the consensus implies.
We still prefer tech broadly as earnings growth looks healthy and poised to broaden, both within the U.S. and globally. S&P earnings and profit margins have also proved more resilient to tariffs than many investors expected. Consensus expectations for the magnificent seven have been revised upward to show 20% earnings growth in the fourth- quarter versus a year ago and then holding up at 19% in 2026, according to Bloomberg data. That compares with 6% for the other S&P 493 in the fourth-quarter and 15% in 2026. Such earnings strength is why U.S. tech stocks depended less on investors pricing in higher valuations for gains last year relative to Europe and other regions. From the U.S. “reciprocal tariff” lows in April, the MSCI USA slightly outperformed the MSCI index of global stocks excluding the U.S. in 2025 and outperformed the same index in local currency terms by six percentage points, according to LSEG data.
Powerful mega forces can trump the macro
Second, mega forces and lower Fed policy rates are helping boost cyclical sectors linked to stronger growth, like industrials and materials. This reinforces how we are not in a typical business cycle and mega forces are trumping the traditional macro in driving returns – one of our 2026 Global Outlook themes. Sectors including industrials and materials sit at the intersection of these mega forces: the construction and energy required in the AI data center buildout; the power grid upgrades and infrastructure investment in the energy transition; and increased defense spending tied to geopolitical fragmentation.
Our third theme: Potential productivity gains from AI could break the usual pattern of earnings estimates typically starting high and being revised down as the year progresses. We like financials in both the U.S. and Europe, with the U.S. benefitting from stronger dealmaking activity and lighter regulation. We find that financials is one of the sectors talking the most about AI productivity benefits in earnings calls. The healthcare sector is a laggard that we think is ripe for potential productivity improvements and innovation, with 80% of U.S. healthcare companies guiding earnings expectations higher, FactSet data show. We’re closely watching earnings for evidence of AI-related productivity gains and new profit pools forming.
Our bottom line
We stay overweight U.S. equities and pro-risk on the AI theme. We eye opportunities in sectors beyond tech like healthcare that benefit from AI innovation and see mega forces supporting some key cyclical sectors like industrials.
Market backdrop
The S&P 500 advanced nearly 2% to a fresh record high in the first full trading week of 2026 while European stocks outperformed. The U.S. December jobs report reinforced our view of a “no hiring, no firing” stasis in the labor market. Yet renewed wage gains could point to sticky inflation that will curb how soon the Fed might cut rates again. U.S. 10-year Treasury yields stayed in a tight range around 4.15%. Gold jumped more than 4% back to near record highs.
Attention turns to the U.S. CPI after recent U.S. data proved noisy, owing to disruptions from the government shutdown. November U.S. CPI reflected partially collected data, and no data was collected for October – making this week’s December CPI report and the following releases clearer signals for assessing inflation. Early-year CPI has been strong in recent years, so inflation could surprise to the upside and curb expectations for Fed rate cuts.
Week Ahead
Jan. 12-19 : China total social financing
Jan. 13 : U.S. CPI; China trade
Jan. 14 : U.S. PPI
Jan. 15 : UK November GDP; U.S. Philly Fed manufacturing; U.S. trade
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