Asset management giant BlackRock recently published its half-year outlook for 2024, highlighting a particular focus on artificial intelligence (AI) stocks. The firm remains overweight US and Japanese equities, highlighting the major transformations underway in the global economy.

United States: Positive surprises and rate readjustments In the first half of the year, financial results in the United States were positively impacted by AI, despite negative surprises regarding interest rates. BlackRock expects rate cuts in the second half of the year. However, high earnings expectations could limit positive surprises in this area.

Transition to a real and sustainable economy According to BlackRock, the global economy is undergoing a transformation comparable to the industrial and internet revolutions, with massive investment in AI and the transition to low carbon. These transformations require an adjusted investment approach, favouring active management and greater involvement in private markets.

Identifying winners in an uncertain environment Identifying the beneficiaries of these transformative forces remains a challenge, with a wide range of possible outcomes. BlackRock recommends a portfolio construction approach based on different scenarios, without focusing solely on a base case.

AI and the equity market: Adoption phase and impact on sectors AI is in its early deployment phases, requiring high demand for energy and data centre infrastructure. The next phases will see wider adoption of AI by various sectors, such as healthcare and financial services, which could initially be inflationary before leading to increased productivity and deflationary effects.

Japan: Focus on micro-dynamics and corporate governance In Japan, BlackRock focuses on microeconomic dynamics rather than macroeconomic conditions. The company is seeing improvements in corporate governance and expects Japanese companies' earnings to grow. Currency volatility remains a challenge, although beneficial for Japanese exporters in the current environment.

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