Market Updates

BlackRock stay pro-risk, expecting a cooling labor market to drive more Fed rate cuts, while a government shutdown delays key payroll data and shifts focus to other indicators supporting their overweight in U.S. equities and neutral stance on long-term Treasuries.

This week’s focus is on eurozone retail sales, a wave of central bank speeches, and key US data releases including trade, jobless claims, and University of Michigan sentiment, while last week markets shrugged off the US shutdown, buoyed by equities despite weak confidence and mixed labour data.

The Bank of Japan’s steady policy normalization, ongoing corporate governance reforms, and AI-driven investment trends support an overweight stance on Japanese equities, which remain a top pick.

This week, markets will focus on the risk of a US government shutdown, a heavy slate of global data including the US jobs report and China’s Golden Week spending, and extensive central bank commentary, all against a backdrop of resilient US growth, policy divergence, and signs of industrial recovery in China.

The Fed’s rate cuts support a risk-on stance, but the weaker U.S. dollar has unlocked stronger opportunities in Europe, particularly in credit markets and select equity sectors. BlackRock favour European credit over government bonds and highlight industrials, financials, utilities, and Spanish equities as key areas of relative value.

Markets are set for a busy week with a wave of central bank speeches, eurozone and US PMI data, key inflation readings, and the Fed’s Powell discussing the economic outlook. Last week saw the Fed deliver a 25bps rate cut amid mixed US data, while the BoE and ECB held steady, and China’s property sector continued to weigh on growth despite efforts to boost domestic demand.

BlackRock remain risk-on as expected Fed rate cuts, supported by a softening labor market, should aid U.S. stocks and the AI theme, while they turn neutral on long-term bonds given near-term yield declines but persistent structural pressures.

This week’s market focus is on major central bank meetings, with a likely Fed rate cut following weak US jobs data, while mixed economic signals from China and easing inflation in the US and Europe continue to shape investor sentiment.

Emerging market assets have gained this year, supported by a weaker dollar, stable macro conditions, and structural mega forces, though selectivity is crucial as BlackRock stay neutral on broad EM equities and favor local-currency over hard-currency debt.

This week’s focus is on key economic data from China, the US, and Europe—including inflation prints and the ECB rate decision—following last week’s weaker US labour market data that boosted Fed rate cut expectations, lifted equities and Treasuries, while China’s latest trade report highlighted slowing overall growth but resilient diversification and strength in high-tech exports.