Global investment giant BlackRock has identified key mega-trends and structural changes driving long-term growth, inflation outlook, and new investment openings across sectors and economies.
Here’s a glimpse into what those trends and changes are and their implications:
The transition is set to trigger a massive shift in capital. The speed and shape of this transition will be influenced by an interaction of policy, technology, and consumer and investor preferences.
Opportunities abound across both high-carbon and low-carbon energy systems. Portfolio impacts depend on the timing and scale of these shifts and when markets price them in.
Geopolitics and economic competition
The world has entered a new era of competing geopolitical and economic blocs. Countries are increasingly prioritizing national security and resilience over economic efficiency, leading to a rewiring of supply chains.
Expect investment surges in technology, clean energy, infrastructure, and defense, opening up new opportunities.
Digital disruption and AI
Advances in artificial intelligence (AI) have ignited market enthusiasm. AI tools can automate laborious and mundane tasks, analyze large data sets, and generate new ideas.
The market focus will likely shift from technology producers to large-scale data owners and users in various industries.
Future of finance
Markets for deposits and credit are changing due to regulatory shifts and technological innovation. The end of zero rates is also disrupting traditional business models.
More borrowers will likely turn to private credit as it becomes more competitively priced. The recent repricing offers chances to be agile.
Shrinking workforces in developed markets mean tight labor markets will likely sustain elevated inflation. Selected emerging markets, however, stand to benefit from younger populations.
Opportunities are emerging in healthcare, real estate, leisure, and in companies targeting seniors.
Source: BlackRock Investment Institute, October 2023
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