BlackRock turns bearish on US stocks and shifts bullish towards short-term Treasury bonds

Reuters Singapore, October 13 - The BlackRock Investment Institute stated that, given increased volatility in the artificial intelligence sector, it has downgraded its rating on U.S. stocks to "neutral" and upgraded its rating on U.S. Treasuries, showing a preference for short-term Treasuries.

As the research arm of the world’s largest asset management company, this move not only sends a noteworthy signal of caution towards the U.S. stock market but also reflects confidence in U.S. Treasuries as a safe haven asset.

Details are as follows:

• The BlackRock Investment Institute stated in a report released on October 12 that it has ended its "long-standing overweight position on U.S. equities," downgrading it to "neutral" to "address potential volatility brought by artificial intelligence development." The report was jointly signed by BlackRock Investment Institute head Jean Boivin, BlackRock Chief Investment Officer of Fixed Income Rick Reider, and BlackRock Global Chief Strategist Wei Li.

• BII is gradually withdrawing its "underweight" view on U.S. Treasuries, a stance held for most of the past six years. The researchers are now overweighting short-term Treasuries, stating that the market's expectations for rate hikes have been excessively amplified.

• BII shifted its stance on long-term Treasuries to neutral and has become less negative on Japanese government bonds, saying that the risk-reward profile for investment has improved.

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