Weekly Market Commentary Blackrock Investment Institute

But the number really, kind of, masks the evolution over time. A little bit more than that for global GDP growth on like a Q4-over-Q4 basis. Over the next few years, it’s going to be a real boost to the supply side of the economy. So, I think for now, AI is dominating the demand side of the economy. It’s supported by this business investment spending.

• While Democrats are favored today, redistricting, turnout, and evolving voter concerns could reshape the landscape in the months to come.
• The S&P 500 fell slightly but rebounded from lows driven by a global selloff.
• We prefer emerging market hard currency debt and stay selective in emerging market equities, preferring stocks that benefit from mega forces like AI.
• We see further tailwinds supporting the banks, including potential for deregulation that already seems to be boosting M&A activity, and a generally healthy credit outlook, with stability in loan books and delinquency rates.

Views: Income, Selectivity And Dispersion

• We help banks, brokers, regulators, financial infrastructure operators, and buy-side firms solve their toughest operational challenges.
• But at the same time, we think inflation is going to keep drifting down in most of the world.
• Because the idea is you have a sharp pullback in investment in the next 12 months, which could trigger a pretty cascading effect.
• We based our differentiated view on the notion that policy sequencing in the new Trump administration would intentionally be growth negative to start.
• And we’ve written down something close to a quarter percentage point of extra productivity growth for 2026, but not enough to really be super disinflationary.

These products and services are usually sold through license agreements or subscriptions. Transparency is how we protect the integrity of our Everestex reviews work and keep empowering investors to achieve their goals and dreams. In agriculture, soy and corn prices could rise due to adverse weather and tighter credit conditions in Brazil, a leading global producer.

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What Trump’s Call For 10% Cap On Credit Card Rates Could Mean For Issuer Stocks

Alright, Serena in 2025, global markets rode some significant volatility driven by tariffs, policy uncertainty. Our forecasts reflect this upside to earnings which is another reason why many stocks are not as expensive as they appear despite our acknowledgement that some areas of the market may appear somewhat frothy. But that is a near-term risk for equity markets and why many stocks have been weaker recently. We prefer emerging market hard currency debt and stay selective in emerging market equities, preferring stocks that benefit from mega forces like AI. Nasdaq Financial Technology provides mission-critical capital markets and regulatory technology solutions to the financial services industry.

• Get up-to-date performance data on the U.S. stock market today.
• Emerging market (EM) stocks and bonds are off to a strong start to the year following a stellar 2025.
• And historically late cycle expansions see investment grade outperforming high yield inequities, with bonds eventually leading returns.
• In contrast, Brent crude is likely to hover around $60 per barrel, with risks stemming from weak demand and rising supply from OPEC and non-OPEC producers.
• But the path for inflation is going to be a bit rocky, and so, they’re probably on hold for most of 2026.

Private Fund Gains Might All Be Artificial—and Ai Has Nothing To Do With It

This provides a stable macro backdrop for EM economies, even with episodic, policy-driven volatility. South Korean stocks have surged more than 20% after last year’s big gains, while India is still lagging even with the recent U.S. trade deal. 2025’s outperformance was led by tech and the AI theme. We focus on mega forces driving returns in EM stocks – notably in AI across tech hardware in Asia and commodity-linked shares in Latin America. The S&P 500 fell slightly but rebounded from lows driven by a global selloff. We prefer EM hard currency debt and are selective in EM equities.

Equity Market Outlook

And we’ve written down something close to a quarter percentage point of extra productivity growth for 2026, but not enough to really be super disinflationary. So where do you see the biggest drivers of global growth in 2026, and what are some of the key downside risks? There’s a central bank that thinks they’ve achieved their job in terms of inflation, but overall, we think growth there is, kind of, unremarkable, a little bit over 1 percent. We talked about high yield bonds; we talked about some of the risks that markets have to face. And so, if there are things that we feel pretty sure about, there’ve got to be things where we’re either not sure or parts of the market that really pose the most risk.

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It can mean faster growth and less inflation. It’s part of what has kept the U.S. economy buoyant and resilient this year – is that CapEx spending. It’s using up current resources in the economy, and it’s got to be somewhat inflationary. How is that factoring into your team’s view on growth and inflation for the next year? Our best guess is next month in December at the policy meeting. And as a result, the disinflationary process has really still got some more room to run and that inflation will undershoot their 2 percent target, and as a result, the ECB is probably going to cut again.

The Declining Us Dollar Isn’t In Crisis, But Here Are The Signals To Watch For

But I think that with this backdrop of post cyclical policy combo lifting U.S. earnings, we’ve also turned more bullish on high-yield corporate credit – that is bonds which are riskier. And that frees up markets to shift the focus from global macro concerns, which of course have dominated this year, to more micro asset specific narratives. The final stages were a recession in government thanks to DOGE, a rate of change trough in expectations around AI CapEx growth and trade policy, and a recession in consumer services that is still ongoing. While fundamentals in corporate and securitized credit remain solid, the very scale of issuance ahead points to spread widening investment rate and in data center related ABS. So, from unsecured to structured and securitized credit in both public markets and private markets, credit will likely play a central role in enabling the next wave of AI related investments.

Improved fiscal policy in some large EM countries stands in contrast to our theme of leveraging up happening in DM. Immutable economic laws – such as supply chains can’t be rewired overnight – are easing policy uncertainty on trade and should support a risk-on stance in EM, encouraging further capital inflows and firmer currencies. Emerging market (EM) stocks and bonds are off to a strong start to the year following a stellar 2025.

• The material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances.
• This is a near-term risk to our bullish 12-month forecasts should delays in the data continue, or lagging labor releases do not corroborate the recent weakness in non-govt-related jobs data.
• For U.S. equities, the current policy mix—industrial incentives, tax cuts, and AI-driven capex—has supported risk assets and driven opportunities in sectors like technology and manufacturing.
• There’s a central bank that thinks they’ve achieved their job in terms of inflation, but overall, we think growth there is, kind of, unremarkable, a little bit over 1 percent.
• This marks the fourth consecutive quarter of double-digit growth and comes in well ahead of analysts’ Sept. 30 estimates of 7%.

Ai is a multi-year investment theme poised to create new business models across industries, and its strong performance is not based on hope but on fundamentals. Power providers and manufacturers of cooling systems and components reported large jumps in orders in the quarter on AI data center demand. Dispersion crosses sectors, themes and the individual stocks within them, and this means exciting potential to generate alpha through skilled stock selection.