The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines and AI) and services (such as Zoom calls) and moving into new markets, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

BlackRock is the largest asset manager in the world, with $11.475 trillion in assets under management at the end of September 2024. Its product mix is fairly diverse, with 55% of managed assets in equity strategies, 26% in fixed income, 9% in multi-asset classes, 7% in money market funds, and 3% in alternatives. Passive strategies account for around two thirds of long-term AUM, with the company's ETF platform maintaining a leading market share domestically and on a global basis. Product distribution is weighted more toward institutional clients, which by our calculations account for around 80% of AUM. BlackRock is geographically diverse, with clients in more than 100 countries and more than one third of managed assets coming from investors domiciled outside the US and Canada.

BlackRock provides investment management, risk management, and advisory services for institutional and retail clients worldwide. Its range of products includes separate accounts, mutual funds, the iShares franchise of ETFs, and other pooled investment vehicles. Assets under management were $11.5 trillion as of September 30, 2024. iShares is a global leader in ETFs, with funds in multiple asset classes and $3.9 trillion in ETF assets under management as of September 30, 2024.

Monday Tee Up: Corporate America Checks In The third-quarter earnings floodgates open this week, despite Monday being a partial holiday (with the bond markets closed). Wall Street will be focused on retail sales data, looking for updates on consumer spending. Last week, the Dow Jones Industrial Average was higher by 1.2%, while the S&P 500 and the Nasdaq both gained 1.1%. For the year, the DJIA is higher by 14%, while the S&P 500 and the Nasdaq have both popped 22%. The earnings calendar this week is packed with big companies from a range of sectors. On Tuesday, Citigroup, Bank of America, Goldman Sachs, Charles Schwab, PNC Financial, State Street, United Airlines, Johnson & Johnson, and United Health all report. On Wednesday, Morgan Stanley, U.S. Bancorp, Discover Financial, and Abbott Labs weight in. On Thursday, it's Netflix and Travelers, and on Friday, American Express and Procter & Gamble step up to the plate. Earnings grew 13% in the second quarter. We expect 3Q earnings growth of 5%-7%. For full year, we forecast roughly a 7%-9% gain. In the 3Q, we expect Information Technology, Communication Services, and Healthcare to be the sectors that shine. On the economic calendar, Retail Sales will be updated on Thursday, as will Industrial Production and Capacity Utilization. On Friday, Housing Starts and Building Permits will be released. Argus Chief Economist Chris Graja, CFA, is highlighting Retail Sales as the call of the week. Chris expects the September report to show an annual increase of 2.2%. He adds that 'the report will be a timely health check on consumers ahead of the important holiday season. Employed consumers do their best to make the holidays special for the people they care about. The decline in the September unemployment rate to 4.1% should be a positive catalyst for shopping in November and December.' Last week, there were mixed signals on inflation. CPI slowed to 2.4% for September, down from 2.5% in August. Core CPI ticked up to 3.3% for September, compared to 3.2% in August. Looking deeper into core inflation data, the widely-watched shelter component is still proving to be sticky, with a rise of 4.9%. The Bureau of Labor Statistics said that this one component accounts for more than 65% of the total 12-month increase. Other categories with sizable increases include motor vehicle insurance, up 16%, and medical care, up 3.3%. Mortgage rates jumped up to 6.32% for the average 30-year fixed-rate mortgage. Gas prices dropped 4 cents to $3.14 per gallon for the average price of regular gas. The Atlanta Fed GDPNow indicator is forecasting for 3Q and calls for expansion of 3.2%. We have raised our 3Q growth forecast and now expect 3.0% this quarter, up from our prior forecast of 1.6%. The Cleveland Fed CPINow indicator for October currently is at 2.6%. The next Fed rate decisions are on November 7 and December 18. For November, odds are at 90% that there will be a 25-basis-point (bps) rate cut, this according to the CME FedWatch tool. There had been chatter about a bigger cut, but recent strong jobs data out squelched that idea. Argus forecasts two more rate cuts by the end of 2024 and three more in 2025, all by 25 bps.