BlackRock: US technology companies' earnings exceed expectations, maintaining overweight positions in US and Japanese stocks
BlackRock maintains an overweight position on US and Japanese stocks, and is optimistic about artificial intelligence investments. In the second quarter, the profit growth of US technology and non-technology companies was 20% and 5% respectively, both exceeding expectations. Despite the technology sector leading the way, there are also initial signs of profit growth in the non-technology sector. Although the rise in the US unemployment rate in July has raised concerns about a recession, BlackRock believes it is a slowdown in economic growth rather than a recession. Adjustments to the Bank of Japan's policies need to be cautious, but mild inflation can promote corporate profit growth
According to the Zhitong Finance and Economics APP, BlackRock stated in a post that data shows that in the second quarter of this year, the profit growth rates of the US technology industry and non-technology industry were 20% and 5% respectively, both exceeding previous expectations. Despite the technology industry's leading position, the non-technology industry is expected to achieve its first profit growth since the end of 2022, indicating that the momentum of strong profit growth may be expanding. Cost pressures easing and inflation moderating are both favorable for US companies. BlackRock maintains an overweight position on the Japanese stock market and US stocks, and is optimistic about investment opportunities related to the artificial intelligence theme.
Recently, the Bank of Japan has been trying to normalize its policies without causing a decline in inflation. In July, the Bank of Japan suddenly raised interest rates, with a vague policy framework and considering the issue of the yen exchange rate. With an increasing number of policy mistakes by the Bank of Japan, it is now proceeding with policies more cautiously, hence BlackRock maintains an overweight view on Japanese stocks. Further unwinding of arbitrage trades and yen strength may pose risks, but the benign cycle brought by mild inflation in Japan helps improve wage levels and corporate profits. Corporate reform that benefits shareholder value is also crucial.
Amid the recent volatility in global stock markets last week, Japanese stocks were hit the hardest. At the same time, the US unemployment rate rose in July, triggering market concerns about a US economic recession. However, from historical data, the current US unemployment rate remains relatively low, and the increase in the unemployment rate is due to the continuous increase in new labor brought by immigrants, rather than unemployment itself. In the past six months, the total employment in the US has increased by over 1 million, far exceeding the pre-recession levels. Taking into account various data, BlackRock believes that this is actually a slowdown in economic growth, rather than an economic recession