BlackRock's Koesterich: Trimming Equities a Bit After Extraordinary Rally

The video discusses the recent extraordinary market rally, highlighting the VIX index's decline and US equities' rise. Despite these gains, the underlying economic situation remains unchanged, prompting a reevaluation of equity holdings. The discussion shifts to emerging markets, particularly China, emphasizing opportunities in domestic consumption sectors like Internet retail and liquor manufacturing. The focus is on areas less affected by trade tensions and more aligned with long-term growth in Chinese consumption, supported by a growing middle class and attractive valuations.

What has been the trend in the VIX index over the past nine weeks?

• It has increased significantly.

• It has fluctuated unpredictably.

• It has remained stable.

• It has decreased consistently.

Why is the speaker suggesting to trim equity holdings?

• To avoid potential tax increases.

• Due to a predicted economic boom.

• Because of extraordinary market gains.

• To invest more in bonds.

What is a key characteristic of emerging markets according to the speaker?

• They are primarily driven by exports.

• They offer diverse opportunities.

• They are unpredictable.

• They are homogeneous.

Which sector in China is highlighted as having potential for growth?

• Automobile manufacturing

• Domestic consumption

• Heavy industry

• Agriculture

What is one reason for the attractiveness of Chinese companies mentioned in the transcript?

• High dividend payouts

• Rapid technological advancements

• Single-digit PE ratios

• Strong government support