Market Updates

 
U.S. & Japan a tale of two overweights

BlackRock Commentary: U.S. & Japan: a tale of two overweights

The upcoming Federal Reserve and Bank of Japan (BOJ) meetings, along with recent data, draw attention to the macroeconomic landscapes of the U.S. and Japan. While U.S. markets reflect optimism amid cooling inflation, BlackRock anticipates that positive risk appetite will remain largely unchallenged in the months ahead.

Low-carbon transition themes in 2024

BlackRock Commentary: Low-carbon transition themes in 2024

BlackRock is closely monitoring how the low-carbon transition is impacting investment returns, recognizing it as a significant force shaping the market landscape. They anticipate potentially market-moving developments in three key areas this year.

Taking selective risk in credit

BlackRock Commentary: Taking selective risk in credit

Focusing on details and staying adaptable to capitalize on opportunities in the evolving environment are fundamental principles guiding investors’ approach. While BlackRock previously favored investment-grade credit, they are now considering fixed income investments where spreads have not tightened as significantly. They continue to express interest in private credit.

Japan stocks: high can go higher

BlackRock Commentary: Japan stocks: high can go higher

BlackRock is optimistic about the potential continuation of Japan’s equity rally, distinguishing it from previous false starts. They anticipate that both macroeconomic trends and company-specific advancements will propel the next phase of growth. The anticipated corporate earnings growth, foreseen since 2023, is now materializing as expected.

Strategic reasons to get active

BlackRock Commentary: Strategic reasons to get active

U.S. stocks rebounded despite the impact of strong inflation data, suggesting resilience in investor risk tolerance. While maintaining an overweight position in U.S. stocks, BlackRock remain strategically active, prepared to adjust their stance in anticipation of potential inflation concerns.

Staying selective in emerging markets

BlackRock Commentary: Staying selective in emerging markets

BlackRock observes increased backing for emerging markets (EMs) amid the market’s positive outlook on risk assets, supported by sustained U.S. growth, moderating inflation, and the Federal Reserve’s readiness to lower policy rates. EMs have demonstrated resilience in the face of recent Fed rate hikes.

Earnings unlikely to spoil stock rally

BlackRock Commentary: Earnings unlikely to spoil stock rally

The U.S. Q4 corporate earnings season is currently underway. BlackRock believes that this won’t dampen the positive risk appetite at the moment. They maintain an overall overweight position in U.S. stocks, anticipating that the optimistic market sentiment will continue for now.

Upgrading our broad U.S. stocks view

BlackRock Commentary: Upgrading our broad U.S. stocks view

The surge in U.S. tech stocks fuelled by enthusiasm for artificial intelligence (AI) uplifted the market throughout 2023. According to BlackRock, the current rally shows potential for continuation, although they remain flexible in anticipation of a resurgence in inflation later this year.

Geopolitical fragmentation plays out

BlackRock Commentary: Geopolitical fragmentation plays out

The unfolding events in Asia and the Middle East underscore the significance of geopolitical fragmentation, one of the five mega forces or structural shifts monitored by BlackRock. This fragmentation stands out as a crucial factor contributing to persistent inflation pressures, prompting the maintenance of policy rates above pre-COVID levels.

Why stocks can stay upbeat, for now

BlackRock Commentary: Why stocks can stay upbeat, for now

BlackRock concurs that inflation is expected to approach 2% this year, thereby bolstering that narrative at present. They will closely observe the earnings season for any indications of vulnerabilities, particularly in the context of elevated valuations.

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