BlackRock: Markets calm on top line, but volatility under the hood

• Top-line market calm hides significant volatility in individual stocks, especially within the AI sector.
• Diversification is crucial, with opportunities identified in healthcare, European banks, and sustainable energy/infrastructure names.
• The shift from share buybacks to debt issuance for capital-intensive AI investments increases pressure on companies to generate returns.

BlackRock's CIO for Fundamental Equities, Helen Jewell, discusses how underlying volatility, particularly in AI names, is masked by calm top-line market indices. She emphasizes the critical need for portfolio diversification and active management to navigate these concentrated and volatile market conditions, highlighting opportunities in healthcare, European banks, and sustainable energy infrastructure.