BlackRock Investment Institute Videos

­Market take

Weekly video_20250313

Wei Li

Global Chief Investment Strategist, BlackRock

Opening frame: What’s driving markets? Market take – special edition

Camera frame

In this special edition of Market Take, I will dig into what’s behind the recent market volatility - especially in the U.S.

Title slide: A disconnect with economic fundamentals 

1. S. recession fears sparked a stock pullback.

We actually don’t think the selloff is consistent with the fundamental picture. You look at the strong job creation, you look at the still-good earnings expectations for this year, 12% [earnings growth] for [the] U.S. equity market [according to data from Bloomberg as of 12/03/2025]. They are consistent with an economy that is holding up okay.

Now, a rapid rotation out of very crowded positions contributed to stock market pressure in recent days. And the very high level of policy uncertainty further led to risk premia repricing, i.e. investors demanding more for holding risk in this environment. But over the six-to-12 month horizon we expect some of those [uncertainties] to dissipate.

2. Tech valuations look more compelling

The 'magnificent seven' forward [price-earnings ratio] in aggregate is [around] the same level as it was during the time of ChatGPT’s rollout.

When you look at the estimates for [the magnificent seven’s] [2025-26] earnings, revenue, operating margins, they haven’t worsened so far this year, notably. If you look at their [capital expenditure] commitments it’s even increased versus what was already a record year last year [according to data from Bloomberg as of 12/03/2025].

3. Selective opportunities in global markets and gold

We recently closed [our] underweight in European equities and we keep our tactical overweight in Chinese equities as some of these unloved and underowned exposures start to play catch-up.

And we also find that in this environment of inflationary pressure and high debt, gold has proven to be a better diversifier compared to long-term [government bonds].

Outro: Here’s our Market Take

The bottom line is we don’t think the market selloff is supported by economic fundamentals. Yet in the very near-term, very elevated policy uncertainty and positioning can keep the pressure up.

Over the horizon of six to 12 months, I would spotlight opportunities in tech that has become more attractive in valuation and also observe that gold can play a better role as diversifier than [long-term] [U.S.] Treasuries in portfolios.

Closing frame: Read details: blackrock.com/weekly-commentary

BlackRock Bottom Line: 2024 Global outlook

Speaker: Wei Li, Global Chief Investment Strategist, BlackRock Investment Institute

Script:

Higher interest rates and greater volatility define the new regime we’re in. In turn, that’s creating greater dispersion of returns.

We think investors will benefit from taking a more active approach to portfolios as we head into next year. 

Here’s our three investment themes for 2024: number one, managing macro risk; number two, steering portfolio outcomes; and number three, harnessing mega forces.

BlackRock Bottom Line open

Title: BlackRock Investment Institute 2024 global outlook

Our first theme is managing macro risk. Production constraints mean central banks face tougher trade-offs between inflation and growth – they can’t respond to faltering growth like before. This leads to a wider set of outcomes and a more uncertain macro outlook.

We don’t think investors should wait for the macro environment to improve. Instead, they should look to neutralize macro exposures or be very deliberate about which risks they take.

Our second theme is steering portfolio outcomes. We believe the new regime rewards an active approach to portfolios. Greater volatility and dispersion of returns create space for investment expertise to shine – that involves being more dynamic with indexing and alpha-seeking strategies, while staying selective.

Our third theme is harnessing mega forces. We see five structural shifts reshaping markets and driving returns now and in the future. We think they have become important portfolio building blocks on their own.

The bottom line is: Going into 2024 in the new regime, we want to put money to work. We believe investors should take a more active approach to their portfolios and be deliberate in taking portfolio risk.