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BlackRock: 'We shun most stocks' amid unrealized recession risk

Alexandra Semenova · Reporter
Wed, September 28, 2022 at 1:20 PM · 2 min read

The world’s largest investment manager is avoiding the stock market and warning investors to do the same.

Strategists at BlackRock’s (BLK) Investment Institute said in a note published Monday that the firm was shunning “most stocks” as monetary policymakers underestimate the severity of a potential recession that could ensue from aggressive rate hikes.

“Many central banks, like the Fed, are still solely focused on pressure to quickly get core inflation back to 2% without fully acknowledging how much economic pain it will take in a world shaped by production constraints,” a team led by Jean Boivin wrote in the note. “We’re tactically underweight developed market stocks and prefer credit.”

BlackRock’s message comes amid a brutal rout in equity markets that has all three major averages in bear market territory. As of Tuesday’s close, the benchmark S&P 500 was roughly 24% below its January all-time high, while the Dow was down about 21% over the same period. The technology-heavy Nasdaq has plunged 33% since peaking in November 2021.

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