📈 BlackRock: Staying Risk-On in a More Fragile World

📈 BlackRock: Staying Risk-On in a More Fragile World
BlackRock's July 20 weekly commentary says renewed Middle East tensions have made the macro backdrop more fragile, but the firm stays pro-risk, preferring U.S. equities over long-term government bonds. Brent crude has risen 13% since the latest escalation, though futures point to a temporary disruption rather than a prolonged supply shock; BlackRock estimates the conflict will shave about 0.4% off 2026 global GDP and add roughly 0.8 percentage points to headline inflation. Last week's sharp semiconductor selloff (Philadelphia Semiconductor Index -11%) is viewed as overstated, driven by fears that cheaper Chinese AI models could challenge frontier models. Consensus S&P 500 earnings growth for 2026 has been revised up to 25% from 18% three months ago, but BlackRock now sets a higher bar: earnings growth must keep outpacing the rising cost of capital to justify staying overweight equities.
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