BlackRock Warns Against Dip Buying as High-Volatility Era Dawns
There’s no quick recovery in sight for stocks and bonds that are having their worst year in at least three decades, according to strategists at $Blackrock(BLK.US$.
“We are braving a new world of heightened macro volatility and higher risk premia for both bonds and equities”
“We are braving a new world of heightened macro volatility and higher risk premia for both bonds and equities”
The world’s largest asset manager retains its long-term bullish view on equities, but has gone underweight developed-market stocks in the near term as the risk of stalling growth rises. Investors should bet on credit instead, because valuations have improved and default risk is contained, the strategists said.
Despite the surge in yields, BlackRock remains bearish on government bonds on both a strategic and tactical basis and is underweight long-dated government debt, including U.S. Treasuries.
At the same time, BlackRock sees some pockets of value in government debt. It favors inflation-linked bonds, especially those issued by European nations, and it turned overweight UK sovereign debt on July 11. Both are mispriced by the market, according to BlackRock.
Despite the surge in yields, BlackRock remains bearish on government bonds on both a strategic and tactical basis and is underweight long-dated government debt, including U.S. Treasuries.
At the same time, BlackRock sees some pockets of value in government debt. It favors inflation-linked bonds, especially those issued by European nations, and it turned overweight UK sovereign debt on July 11. Both are mispriced by the market, according to BlackRock.
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