BlackRock: US tech earnings beat expectations, maintain overweight on Nasdaq and NIKKEI

BlackRock said that data suggests that this earnings season, US tech companies and non-tech companies have earnings growth of 20% and 5%, respectively, both above expectations. Although tech companies are leading, non-tech companies are expected to see their first earnings growth since the end of 2022, indicating that the earnings growth momentum may be broadening. The easing cost pressure and the easing inflation are both good for US companies. BlackRock maintains an overweight position in Japan and South Korea, and is bullish on investment opportunities related to artificial intelligence.

Recently, the Bank of Japan has been trying to restore policy normalization without causing a fall in inflation. In July, the Bank of Japan suddenly raised interest rates, with the policy framework unclear and the yen exchange rate issue included in the consideration. The Bank of Japan's policy mistakes have increased, and now the Bank of Japan will be more cautious in pushing policy, so BlackRock maintains an overweight position on Japanese stocks. Further unwinding of carry trades and a stronger yen may pose risks, but the benign cycle of mild inflation in Japan helps to improve wage levels and corporate earnings. Corporate reforms that boost shareholder value are also key.

Last week's global market volatility started with Japan. At the same time, the US unemployment rate data in July rose, and the market's concerns about the US economic recession triggered a decline. However, from historical data, the US unemployment rate is still low, and the increase in the unemployment rate is due to the increase in new labor force brought by immigration, not unemployment. In the past six months, the total employment in the US has increased by more than 1 million, far above the level before the economic recession. In summary, BlackRock believes that this is actually a deceleration in economic growth, rather than a recession.