π¦ BlackRock: Staying Risk-On in a More Fragile World
BlackRock's Investment Institute says renewed Middle East tensions have put geopolitical risk back in focus, but markets have stayed remarkably calm. Brent crude has risen 13% since the latest escalation, though futures pricing points to a temporary disruption rather than a prolonged supply shock; BlackRock estimates the conflict could shave about 0.4% off global GDP and add roughly 0.8 percentage points to global inflation in 2026. Despite a sharp semiconductor selloff (the Philadelphia Semiconductor Index briefly entered a bear market) on fears that cheaper Chinese AI models could challenge frontier players, BlackRock views the reaction as overblown and keeps its overweight on U.S. equities versus long-term government bonds, with consensus S&P 500 earnings growth now seen at 25% for 2026. The firm remains pro-risk but nimble, watching this week's Fed decision for signs of a more fragile macro backdrop.
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