BlackRock: Global trade uncertainty has decreased, maintaining an overweight view on U.S. stocks

According to the Zhitong Finance APP, BlackRock stated that unbreakable economic laws will constrain the tariff rates from returning to the high levels of April 2, and trade uncertainty has decreased. As major tax policies and regulatory reforms gradually unfold, maintaining the current risk appetite and holding an overweight view on U.S. stocks.

The U.S. government is also advancing significant tax policies and regulatory reforms to promote economic growth. In terms of taxation, the budget bill currently under consideration by Congress extends and expands the tax cuts from the 2017 Tax Cuts and Jobs Act, which may boost investor confidence. Another uplifting factor is the G7's exemption of U.S. multinational corporations from a series of taxes, while in exchange, the U.S. budget bill has repealed Section 899, which originally allowed for the taxation of overseas investors' assets in the U.S.

BlackRock mentioned that in terms of regulatory reform, the Federal Reserve has proposed revising the supplementary leverage ratio (SLR) requirements for banks, which will release U.S. bank capital, allowing them to hold more government bonds, thereby potentially offsetting the impact of weakened demand for U.S. Treasuries from overseas investors. At the same time, although the rise of private credit as an alternative may lessen the impact of this reform on bank lending compared to the past, it is still expected to provide financing support for the real economy.

BlackRock is also paying attention to regulatory changes that may favor the future landscape of AI and the financial system, two disruptive trends. The U.S. government is preparing to release an action plan to enhance its competitiveness in the global AI race. Regulatory relaxations by state governments are also advancing. For example, a new regulation in West Virginia allows data centers to bypass zoning regulations and use their own power without relying on local public power. If reforms are passed at the federal level, and tax cuts free up more funds for companies to invest in AI development, this will promote economic growth. This is also expected to create investment opportunities in the energy infrastructure sector, especially in the private equity market. Finally, the Genius Act could provide a clear regulatory framework for stablecoins (i.e., digital currencies based on liquid assets such as cash and short-term government bonds), encouraging their wider application and thus promoting the development of the future landscape of the financial system.

BlackRock believes that these market-friendly policy shifts may invigorate the market, which supports our overweight view on U.S. stocks. Compared to government bonds, we are more optimistic about credit bonds, and within government bonds, BlackRock still favors short-term and medium-term varieties over long-term ones. As market expectations for interest rate cuts continue to change and short-term market momentum persists, long-term bond yields may temporarily decline. However, persistent inflation will limit the Federal Reserve's ability to significantly cut rates, and high deficits mean that investors expect to receive more compensation for the risks of holding long-term government bonds, i.e., term premium