BlackRock is bullish on US stocks and Japanese stocks, and sees that the earnings growth of companies in these two markets is still ongoing. Although earnings performance in other regions around the world is relatively weak, taking a detailed analysis and aligning granularity can still capture investment opportunities, such as European bank stocks. Related data shows that earnings in about half of European industries continue to decline. However, BlackRock is optimistic about the European financial sector, as high interest rates have enabled banks to have outstanding earnings performance. In early 2024, BlackRock was optimistic about US stocks and Japanese stocks because it expected their earnings growth to be the strongest, which indeed turned out to be true. In the past 12 months, compared to global markets where corporate earnings only grew by 1%, US companies achieved a 9% earnings growth. The rapid rise in US stocks can be attributed to investment themes related to AI and the resilience shown by the US economy. The earnings growth of the seven giants in the US tech industry over the past year reached 45%. Meanwhile, Japanese companies saw a 14% increase in earnings due to favorable shareholder reforms and the return of inflation. The market generally expects that although earnings of global companies are improving, the US will still maintain a leading advantage. BlackRock believes that the varying earnings performance of companies indicates that the current situation is not a typical business cycle, emphasizing the importance of focusing on AI themes and taking a refined analysis. BlackRock Institute believes that in 2025, can corporate earnings meet the higher expectations of the market? Although market forecasts generally tend to be revised downwards, BlackRock expects that corporate earnings outside the US will achieve widespread growth on a lower base, and BlackRock still stands by its viewpoint. In the US, the seven giants in the tech industry are expected to continue to drive overall corporate earnings growth in the US due to the disruptive trend of AI. However, as inflation eases, consumer spending grows steadily, and regulatory relaxation is expected, sectors outside of tech may also develop, narrowing the leading advantage of these tech giants. As AI infrastructure is built, public utilities, industrial, energy, and real estate companies that provide key AI investments also offer investment opportunities with profit growth potential. With the US expected to lower corporate tax rates and ease regulations, BlackRock believes the market may continue to prefer risk assets, hence maintaining an overweight view on US stocks. Japan is another bright spot. Over the past year, the overall earnings growth of Japanese companies has even exceeded that of the US. The macroeconomic outlook in Japan is more positive, driven by inflation return and favorable shareholder reforms, leading to an optimistic market sentiment. Despite the recent appreciation of the yen which may affect corporate earnings, the strong domestic market prospects in Japan can continue to drive earnings growth. Additionally, the economic recovery in Japan can mitigate the impact of threats such as rising US protectionism. Therefore, BlackRock maintains an overweight view on Japanese stocks. For regions with more challenging market prospects, aligning granularity and adopting refined investment analysis are crucial. Europe is still struggling to address challenges, achieving earnings growth for the second consecutive quarter in the third quarter. Moreover, BlackRock is optimistic about the public utilities sector, as it is one of the few sectors outside the US benefiting from the development of AI. In the UK, due to attractive valuations and stable political situation after Labour's overwhelming victory in the UK elections, BlackRock had an overweight view on UK stocks earlier this year tactically. However, investors have not shown renewed interest in investing in the UK as BlackRock expected, and the earnings level of UK companies is contracting.