Analysts from the world's largest investment company BlackRock assess the unemployment data in the US, which became one of the reasons for the collapse of global stock markets on August 5, as a sign of an economic slowdown, but not a recession. This is stated in a BlackRock report published after the events of August 5, which Forbes has become familiar with.
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What is the report about
The company did not reduce the volume of investments in shares of American companies, which dominate its portfolio and consider the current market decline a good opportunity to buy such assets. In anticipation of exaggerated fears about a US recession, analysts from the investment bank Goldman Sachs also wrote in a report dated August 4.
Worse than expected US labor market data could be a sign of an economic slowdown, but not a recession, since the main cause was not layoffs but immigration into the country, which caused an increase in the labor supply.
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“Job creation is slowing, but the average over the past three months is 170,000,” says a BlackRock report.
Despite the slowdown in the pace of consumer spending growth in the US, the investment company's analysts consider this indicator to be “healthy”. They also noted higher expectations for US corporate profits in the second quarter.
“Earnings growth for S&P 500 companies amounted to about 13%, compared with the 9% expected at the beginning of the year,” the report notes.
“We continue to hold a dominant position in growth assets due to the ‘mega-power’ of artificial intelligence,” BlackRock said in the report. “We also believe that the sell-off in equity markets presents opportunities to buy assets, as prices may have been impacted by investor expectations for a deeper Fed rate cut.”
Read: How Buffett emerged from the market slump with a $277 billion bag of cash
Recall
On August 5, stock markets around the world suffered one of the largest collapses in recent years. Investors sold off stocks due to fears of a recession in the United States after the release of a labor market report in the country on August 2 with below-expected indicators. In addition, Japan raised its key interest rate to 0.25%.
The third factor is a series of less than convincing reports from major technology corporations. In particular, Nvidia announced the day before a three-month delay in the launch of new artificial intelligence chips due to design flaws, which could affect customers such as Meta, Google and Microsoft.
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