BlackRock upgrades European stocks to 'overweight' on economic restart

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“The region is exposed to a cyclical upside as the economy restarts, against a backdrop of solid public health measures and a galvanizing policy response,” BlackRock said in its mid-year outlook.

BlackRock also downgraded U.S. equities to “neutral” citing risks of fading fiscal stimulus, an extended epidemic as well as renewed China-U.S. tensions.

In fixed income, BlackRock said it liked U.S. Treasuries and expected long-term bond yields to fall further than other developed market peers.

In emerging markets, the world’s largest asset manager downgraded both hard currency debt and equities to “underweight”, citing limited policy space to counter the economic fallout from the coronavirus pandemic.

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