Expert insights from BlackRock Fundamental Equities – Q4 Stock Market Outlook

Stock Market Monitor

04-Oct-2024
  • Helen Jewell

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Key points

01

Broader market leadership amid rate cuts

Major stock markets have hit record highs this year. Yet we’ve seen shifts beneath the surface as investors anticipated – and then digested – cuts to interest rates.

02

Positivity amid volatility

Investor worries about global economic growth may produce market swings, but we see a generally positive environment for equities.

03

Infrastructure momentum

Infrastructure companies may benefit from lower rates as well as long-term themes such as digitalisation and decarbonization.

A positive environment for equities

At BlackRock Fundamental Equities we believe central bank rate cuts are likely to create a supportive environment for equities as 2024 draws to a close – but market worries around recession and artificial intelligence investment returns may result in more volatility and further broadening in market leadership as investors seek to diversify portfolios.

We see opportunities in the kinds of companies that may benefit from lower rates. We also believe it’s sensible to stick with "structural winners" – companies that have long-term earnings resilience linked to forces of change – amid potential volatility.

Rate-cut beneficiaries and structural winners

Global renewable energy installed capacity, 2023-2050

Source: BloombergNEF Energy Outlook, May 2024. Forecasts may not come to pass.

Construction and housing

Some recent earnings calls in this area highlight green shoots of activity in parts of Europe where construction was severely impacted by higher rates.

Stable income payers

Companies that offer stable sources of income may be set for a period of popularity, as this income becomes more attractive relative to declining bond yields.

Healthcare stocks

We see an attractive mix of steady income and rapid innovation in the sector, backed up by the growing demand for healthcare from ageing populations.

Infrastructure opportunities

We believe infrastructure – the physical backbone of any economy – is supported by the Four Ds: Digitalisation, Decarbonisation, Deglobalisation and Demographics.

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Risk warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Important information

This document is marketing material.

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