BlackRock’s Wei Li prefers US equities over government bonds, citing AI-driven earnings growth

Wei Li, BlackRock’s global chief investment strategist, said she prefers equities over both credit and government bonds from a “total portfolio perspective,” while noting there are still “good income opportunities within fixed income” worth leaning into. The case for stocks over bonds BlackRock has maintained an overweight stance on US equities, driven largely by a thesis that corporate earnings, particularly in AI-adjacent sectors, have more room to run. The firm revised its IT sector growth expectations upward throughout 2026, reaching approximately 44% growth for the sector this year. BlackRock’s midyear outlook explicitly positioned US equities as overweight and long US Treasuries as underweight. The reasoning: persistent inflation uncertainty and rising term premiums make holding 10-year-plus government debt a losing proposition relative to the alternatives. Selective, not dismissive, on fixed income BlackRock’s Fall 2026 Investment Directions report, published on September 1, spelled out the firm’s preference for shorter maturities where yields remain elevated but duration risk is manageable. The firm’s August 31 weekly commentary reinforced the message, advocating a “risk on...