Let's talk about the big picture now for the markets. With all of these big important events on deck,

joining me now is Christy Akulian, BlackRock head of IShares Investment strategy Americas for this week's ETF report brought to you by Pimco.

Christy, it's good to see you. Obviously, it's going to be a real busy day here. Um, I would ask when it comes to the tech earnings, let's take those first. What are you going to be watching more most closely that gives you the information you need to know if the rally is going to continue broadly and in the tech share specifically.

Yeah, absolutely and thanks for having me. It does feel a little bit like the calm before the storm this morning. Obviously, such a big important day. Um, you know, we're watching earnings overall. Um, you know, I do think, you know, you mentioned this as well. It really feels like AI is in the driver's seat right now, whereas oil was in the driver's seat for most of March, sort of, um, probably unsurprisingly as we've moved from sort of the the conflict really dominating headlines to being right in the thick of earning season.

So we're still seeing tech be the largest contributor to S&P 500 earnings growth, growing earnings about 30%. The rest of the market is about half that, um, if you look at that overall. I think some of the the most important things that the market's going to be looking for is some of the conversation what we're hearing, um, about CAPEX, about AI spend. It feels like depending on what day and what mood you catch the market and CAPEX spend can either equal confidence in terms of, uh, the future or it can be met with skepticism as well in in terms of making sure that there's revenue on the other side of that.

We do think that, you know, we're we're seeing sort of a resurgence in the AI trade if you will in terms of flows in terms of earnings growth. We are believers that that can continue and and we think that the tech earnings are going to going to show up pretty well this quarter as well. This should be the sixth quarter um of double digit earnings growth for the S&P 500.

I mean, you know, we've seen a mixed performance from the companies that are going to be reporting tonight as of late, Semiconductors have just absolutely ripped uh recently. So how are you thinking about where investors should be deploying capital within tech.

Yeah, I I think it's, you know, a very important question. Obviously earlier this year, um which which feels, you know, like six months ago. It was really only about two months ago. Um is we saw a lot of skepticism around software and what the future of that is going to look like in this world um of of AI, right? Um so we're seeing a huge amount of dispersion with e with even within the tech uh industry or within the tech sector as well. We like targeting the theme more specifically, what's doing well right now is is sort of the the foundational layer, the physical layer of AI development, Um and we see you know value across that entire value chain. Um so something like BIAI which is our BlackRock AIF can access all parts of that. Um and and really what we're seeing is just again, a huge amount of dispersion, AI creating winners and losers. It's not as simple as just allocating to a sector right now. You have to be a lot more specific around the theme.

Interesting. Um, so Christy, that's that's AI and tech. Let's talk about the other thing or things, I guess that are happening today. You know, we have the Warsh confirmation which is expected to go through, then we have the Fed's presser this afternoon. Um, so what what are you going to be key in on there because we're in this sort of in between state, right? It feels like when it comes to uh Federal Reserve policymaking.

Yeah, absolutely. We we're we're firmly in the camp that we are on pause um sort of indefinitely right now. You know, we're sort of we're, you know, we're getting a lot of changes, um, perhaps in personnel. We don't expect obviously a change in the policy rate today. We'll be watching closely to see um what some of the language that that may be updated in the statement and certainly in the presser um around how the FOMC is thinking about, um, you know, oil prices being higher with the flow through of that looks like to inflation. um, you know, and how how sticky um or not we expect that to be. So I think a lot of the focus is going to be around inflation expectations, um and if those have changed recently. Um, but ultimately, you know, we do think the Fed is going to be on pause here for a while, even though we do have a high conviction that the next move is ultimately going to be a cut. The question is really just around when.

Um, and so given this backdrop where there's a lot of um attention on AI and tech is the engine of this market. Um given that we're in this sort of pause frame, I know that you guys are looking at diversification, right? uh in this market. And what are the ways that you're looking at for people to potentially get that? Where should people be diversifying?

Yeah, absolutely. I think there's kind of two parts to that question. One is how to diversify within your equity sleeve. And you know, I think there even though we're seeing stronger growth out of the growth side of the index, the growth cohort of stocks, we actually still see value in being, you know, a little bit more balanced between growth and value as a diversifier. So something like DNF, which is our dynamic factor rotation ETF. We think makes a lot of sense in this market. We came into the year expecting, you know, value out performance, which we did see. Um but but as a result of some of the higher oil prices, the fact that the Fed is going to be staying on hold longer, you know, we do think that growth can continue to outperform here, but it's a little bit of a of a balancing act between those two things.

Outside of the equity sleeve though, if you're thinking about the whole portfolio, you know, what we are arguing for is really more of a basket of sort of diversified diversifiers. We've got another one of these lessons in March where we saw stocks, we saw bonds, we saw gold, all sell off together. And so we think that opens up an opportunity for investors to not just look at alternative asset classes, but to look at alternative strategies as well. So what do I mean by that? You know, I think that sometimes that can look like long short, you know, strategies, that can look like equity market neutral. Really being able to take advantage of some of the relative value trades that all of that dispersion from AI is creating so that you can actually generate alpha, generate value without needing to take a directional bet.

So something like IL, um is I shares alternatives Active ETF, um that gets you some of those alternative strategies in an ETF rapper. And those are things that we have seen do very well this year, even in the face of something like, you know, maybe a stagflationary shock where traditional ballast uh traditional asset classes really haven't been doing the work of diversification.

Christie, thank you so much for your time. Appreciate it.

Thanks.