BlackRock strategists aren’t holding their breath for U.S. corporate earnings to finally turn positive in the third quarter.
Their chart also underscores the key 2023 theme in which a small group of major technology stocks has continued to drive equity gains. Of these, Microsoft Corp. MSFT, +1.45% and Google parent Alphabet Inc . GOOG, +1.49% will report earnings on Tuesday, followed by Meta Platforms Inc. META, +2.52% and Amazon.com Inc. AMZN, +2.00% later in the week. Tesla Inc. TSLA, +0.96% reported earnings last week, while Apple Inc. AAPL, +0.38% is due to report early next month.
Instead, they view “stealth stagnation” over the past 18 months as having “gone under the radar” because consumer spending, gross domestic product and job growth have remained resilient, masking the problem. To that end, the team is overweight short-dated Treasurys BX:TMUBMUSD01M, but also likes quality in equities and fixed-income. They also think there’s still upside in artificial intelligence, investing in the rewiring of globalization, the transition to a low-carbon economy and the future of finance.