BlackRock Maintains U.S. Equity Preference Over Bonds Despite Middle East Tensions on July 20

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According to BlackRock, the asset manager maintained its preference for U.S. equities over long-term bonds on July 20, despite escalating Middle East tensions. BlackRock assessed that while recent geopolitical conflict has intensified, crude oil price movements suggest investors view the disruption as temporary rather than a long-term supply shock. The firm noted that global oil supply remains robust and can absorb current supply disruptions, supported by high initial inventory levels, oil demand adjustment, supportive fiscal policy, and sustained artificial intelligence-led investment momentum. BlackRock stated there is little evidence that recent tensions would sufficiently weaken economic growth to alter risk-on investment strategies, with AI investment booms and infrastructure preferences remaining intact. The asset manager added that corporate profit growth rates continue to comfortably outpace rising capital costs, a key reason for maintaining its equities-over-bonds stance.
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