Outlook Second Half 2024: Wei Li (BlackRock)
Outlook Second Half 2024: Wei Li (BlackRock)
![Wei Li (foto archief BlackRock) 980x600.jpg Wei Li (foto archief BlackRock) 980x600.jpg](/l/en/library/download/urn:uuid:af17414a-34be-4af7-bab0-49e33617d480/wei+li+%28foto+archief+blackrock%29+980x600.jpg)
By Wei Li, Global Chief Investment Strategist, BlackRock
What is the economic outlook for the rest of 2024?
‘Our core view has been that we live in a world shaped by supply: persistent supply constraints mean economic activity is likely to be slower, on average, than before the pandemic. Even with the US economy’s resilience through 2023, activity remains below its pre-Covid trend growth level. We think that in 2024 US growth is set to moderate as the boost from fiscal stimulus and excess savings fades. An increase in immigration has supported the labour market and GDP growth this year. In Europe, the economy has been less resilient to interest rate hikes and bruised by the energy shock. Growth has recently picked up after almost two years of stagnation and we expect to see gradual improvement over the rest of the year.’
Where are the biggest opportunities and threats for investors?
‘US equities are our largest portfolio allocation, and we are overweight in the asset class by incorporating our positive view on AI. We think that AI beneficiaries can still gain, because earnings growth looks robust as evidenced by Q1 results. More broadly, falling inflation and coming Fed rate cuts can underpin the rally’s momentum. As a risk, we note that the bar for further upside surprises in earnings is higher. Equity markets have not repriced to account for high-for-longer rates and equity volatility remains low. We’re monitoring geopolitical risks that have risen this year – including in the Middle East, the Ukraine war, and China-US tariffs.’
We think that AI beneficiaries can still gain.