BlackRock

Global Chief Investment Strategist, BlackRock Investment Institute

Head of Investment Strategy, ETF and Index Investments EMEA

Citigroup

Delta One ETF and Sector Trader

Lehman Brothers

Rates Sales Trading

Student of markets, technology, and human psychology; here to share and learn. 

Micro is now macro. What do we need to believe to justify the enormous #Capex numbers? On a #macro level, growth needs to break out in a way we haven’t seen before, and on a #micro level revenue capture needs to increase for the builders. Both possible, but THIS IS WHAT IT TAKES.

Great to see you @LisaAbramowicz and @AnnmarieHordern, links to interview and the BlackRock 2026 Outlook in comment.

Wei Li

BlackRock Global Chief Investment Strategist

In this environment of transformation #ai trumps macro. So this is not your typical outlook majoring on growth inflation and rate forecasts for the coming year. 

The #bubble question is NOT particularly helpful for investing because bubbles can grow for some time and only became obvious after they burst. It also misses the nuance that this is an environment of winners and losers and one characterisation doesn’t catch all. And importantly, the factors that ultimately will determine if this is a bubble - if the big spend will pay off - have yet to play out with a wide range of credible forecasts. 

Instead, having a clear frame to track transformation and make sense of large numbers is more helpful for investing, in our view, and this is what we look to do in the BlackRock 2026 Global Outlook. For now I stay risk on.

Thank you @CharlesPayne for having me on your show! Links to the 10-min interview and our Outlook in comment.

Big techs are EVEN more important than you think…because they are the backstop of the whole #AI ecosystem, through data centre rental agreements or direct backing of model labs that are not yet profitable. Taking stock: 
➡️ Near term wild price action aside, Mag7 #earnings (orange) have OUTPACED price (white, both normalised to 100) comfortably last 5 years. The YTD picture looks similar. 
➡️ They are still net CASH rather than net DEBT, can you believe. Although that balance is starting to shift.

Steepening #curve (close to steepest this year) has a message: the Fed can keep cutting but markets may still push long yields higher.

This disconnect has made this cutting round a highly unusual one. At the press conference Powell attributed it to #growth expectation, but it is also greater term premium – the additional compensation investors demand for holding long duration Treasuries in portfolios – because of #fiscal trajectory. Term premium has gone from years in the negative to now >70 bps, and I think it can go higher. 

This is why I prefer front end of the Treasury curve over long end.

The numbers DON’T add up right now. Current incremental revenue forecast for big #tech don’t justify their lofty spending plans (chart). 

But the potential of ai goes beyond existing business lines: think ai adoption in non-tech sectors like pharma creating new revenue streams.

But the TRILLION DOLLAR question then becomes who ultimately capture new revenues: providers of #models and #compute, or owners of #data and #IP? 

I have heard compelling cases on both sides made to me and I am still on the fence. Link to BlackRock 2026 Global Outlook detailing our frame in comment.

Europe had a good run early in the year but has given up all outperformance over US since. What I am watching for Europe's investment renaissance:
➡️ European SAVERS need to become
INVESTORS: compared to US counterparts Europeans have 2X the saving rate, and as a result 1/2 the net financial wealth as % of GDP;

➡️ Deepen capital markets: equity #financing measured 91% of GDP compared to 220% in the US in 21. Deeper EU bond markets could lower borrowing cost and lift foreign demand;

➡️ More flexible #fiscal framework + fiscal expansion happening where there is fiscal space. Germany's infra fund and NATO members' defense target promising cases in point (chart);

➡️ More business-friendly #reforms needed: for example removing internal trade and financial market barriers that knock an estimated 10% off potential GDP.

Link to our latest research paper on where we see opportunities in Europe, in comment.

John Bucknavage

Remarkable Dec #Fed cut has gone from <30% likely to 100% in just over ONE week, while the #labor picture hasn’t changed: NO HIRING NO FIRING, SLOWING DEMAND SLOWING SUPPLY. Shows what a narrative-driven market this is. Link to our weekly in comment.

“#Diversification Mirage”, one of the key themes from the BlackRock 2026 Outlook proved more provocative than I expected in our global release this past week. 

Here is why: we all desire diversification from AI because it’s had such a great run, and it’s hard to have a definitive view on something so big and unprecedented. 

But we are saying we just cannot get away with NOT taking an active view on these big questions; assuming a mix of assets is diversified is misleading because everything is driven by just a few principal components such as AI. So decisions made under the guise of diversification may now in fact be BIG ACTIVE BETS, so let’s take them DELIBERATELY, not ACCIDENTALLY. 

Thank you @PaulSweeney and @NorahMulinda for having me on! Links to replay and podcast in comment.

EVERY SINGLE #European sector trades at a notable discount to #US counterparts. Don't know about you I underappreciated that.

Total success isn’t needed on every front of the things I am watching for Europe’s investment renaissance: savers becoming investors, deepening capital markets, fiscal, and reforms…just enough to reassure investors that Europe can make advance in “normal times”, not only under stress.

Scott Barger

If you take away ONE thing from #fomc yesterday, it is the Fed likely erring on the side of being too #easy. They cut rates and signaled a bias toward more, even as they project #inflation staying above target and the labor market holding up. And this is before new appointees join the committee. That may not bode well for inflation down the road, but it is supportive of risk assets for now.

Thank you @NourAmache for having me on! Link in comment.

Unprecedented pace of spend (chart). HOW is it going to be funded? HOW is it going to pay off (or not)? HOW to invest during this unprecedented transformation? Link to BlackRock 2026 #Outlook in comment.

When there is little #growth, we split hair with #spending - UK #budget case in point, £22bn fiscal headroom vs £15bn expected, and UK 10s fell below the mini budget peak in 22 (chart).

When there is growth, spending can run into TRILLIONS - Al capex commitment case in point, although obviously bigger scrutiny too.

The last time this happened was in the roaring 20’s, starting valuations THIS positively correlated with subsequent 12-month returns. And any positive correlation is already counterintuitive. 

To me it shows we are in #unprecedented times: on the one end of scenarios is unprecedented growth breakout finally possible with it significant profit boost, on the other end mean-revert pointing to big revert. Thing is, we just WON’T know for a while. See the BlackRock 2026 #Outlook for our signposting framework, link in comment.

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