Question

WRITE A RESPONSE TO THE FOLLOWING

BlackRock lowered its global growth outlook, based on expectations that trade and geopolitical frictions will continue. The outlook for U.S stocks remains positive, and the firm upgraded European stocks from negative to neutral. Bolvin believes that tariffs are making costs higher for corporations and forcing some companies to change their supply chains altogether. The U.S economy is adjusted for a lowered pace of growth, at about 1.8% in the second half of the year. The firm said central banks are responding to the weaker outlook, and are loosening policy, creating a constructive environment for U.S. and European stocks. The firm said central banks are responding to the weaker outlook, and are loosening policy, creating a constructive environment for U.S. and European stocks. This outlook weakens the economy as a result of the geopolitical and trade frictions. In turn it has increases the potential for easier policy by central banks, including the Federal Reserve and European Central Bank. Bolvin, head of the BlackRock Investment Institute, states “China has become less positive , as a result we were expecting in Europe is not in the cards anymore. It is a downgrade in the broader global picture, and it is directly driven by European and China view.” The firm believes that it is risky but central banks are providing a backstop. BlackRock upgraded emerging market debt but no longer favors emerging market equities, lowering them to neutral from overweight as the outlook for global growth dimmed. The BlackRock investment Institute has downgraded its global growth outlook for the second half, and while it is still sees a good environment for U.S. stocks, it no longer favors market equities. There is a lowered risk of recession, based on that the market looks constructive for the next few months. For that reason, inflation could be a surprise the markets aren’t expecting, at some point after this year.

Answer 1