Blackrock CIO expects US market returns to moderate to single digits over the next 18 months
“The current data is showing strength, but we do need to be mindful of more medium horizon drivers of the economy, and that is gradually slowing down,” he noted.
He expects US Federal Reserve to reduce interest rates by around 150 basis points (bps) over the same period.
From the overall economic perspective, a potential soft landing in the US with lower rates is a positive for risk assets.
China, he noted, is dealing with problems like low consumer confidence, falling wages, and a weak real estate market. These issues could prevent the Chinese market from performing well.
India, on the other hand, is in a good position, with infrastructure plans, both digital and physical, well-aligned with the country’s growth path.
“If I take a 5–10-year view, the structural story; and if you think about the combination of secular, structural and the cyclical factors, they are all lining up in a positive way with the geopolitical tailwind, I do think the potential for market, specifically the higher quality companies in the large cap space, there is still a runway.”
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Seth advised caution when investing in small and mid-sized companies but sees promise in sectors like renewable energy, retail, and consumer goods, where growth opportunities still exist.
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