New Return Drivers In Japan, Europe

Jean Boivin, PhD1.54K FollowersFollow5ShareSavePlay(9min)CommentsSummaryOther mega forces are driving returns beyond AI. This keeps us overweight Japanese stocks, while we favor pharmaceuticals and financials in Europe.The U.S. Supreme Court struck down the use of emergency powers to impose tariffs. The administration is already taking other measures to reimpose them.Final euro area inflation data is in focus this week after the ECB held rates steady. We see policy rates on hold through 2026 if inflation slips below 2%. Oleksii Liskonih/iStock via Getty Images Transcript Markets are laser-focused on the AI buildout – but we see other forces at work as well. Geopolitical fragmentation has Japan and Europe ramping up fiscal spending, creating new return drivers. 1) In Japan, aThis article was written byJean Boivin, PhD1.54K FollowersFollowJean Boivin, PhD, is head of economic and markets research at the Blackrock Investment Institute. Prior to joining BlackRock, Dr. Boivin served as deputy governor of the Bank of Canada and as Finance Canada’s associate deputy minister and G7/G20 deputy. He has taught at Columbia Business School and HEC Montreal. He writes about the global economy, global markets and policy.