Market take
Weekly video_20241118
Devan Nathwani
Opening frame: What’s driving markets? Market take
Camera frame
The U.S. election result reinforces our expectation for persistent inflationary pressures and high-for-longer interest rates.
We evolve our strategic views on a horizon of five years and longer due to this outlook.
Title slide: High-for-longer shapes strategic view
1: All in on infrastructure
As we expected, private equity and real estate valuations have cooled from their recent peaks as financing costs rose with interest rates.
We see more attractive valuations and healthier deal activity in infrastructure equity assets. We also see mega forces benefiting infrastructure.
2: Staying dynamic strategically
We’re in a more volatile macro regime. President-elect Donald Trump’s policy agenda reinforces our expectations for persistent inflation in the medium term and for interest rates settling higher than pre-pandemic.
We remain dynamic with our strategic views.
3: Granularity in fixed income
We reaffirm our preference for short-term over long-term bonds in the U.S. on a strategic and tactical horizon.
We expect long-term yields to rise as investors demand more compensation for the risk of holding them given sticky inflation, persistent fiscal deficits and more bond volatility.
Outro: Here’s our Market take
We upgrade growth private markets to neutral given our preference for infrastructure equity.
While the long-term outlook is uncertain, we’re more pro-risk on a six- to 12-month tactical horizon and lean into U.S. equities.
Closing frame: Read details: blackrock.com/weekly-commentary
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