“Spain remains our preferred country for equity investment.” This is the unequivocal view expressed by US asset manager BlackRock in its mid-year 2026 global outlook report. This document sets out the discussions held between the company’s portfolio managers and senior investment executives on 2 and 3 June to discuss the outlook for the global economy and markets, as well as the implications for portfolios.

Although the valuations of equity products marketed in Spain may appear less attractive than those in other European countries, the country’s domestic growth, the report states, “remains the strongest in the region”. It also indicates that “exposure to Latin America offers opportunities in higher-growth areas”.

Structural challenges
In an international environment currently characterised by constraints on labour, energy and fiscal headroom, BlackRock stresses that the world is being transformed by the strengthening of major powers. In this context, geopolitical fragmentation in Europe creates an urgent need to address the structural challenges that have held back growth for years. And the asset manager sees a trend “favourable enough to partially narrow the performance gap with the United States”.

In equities, the report states, “we are attracted to the financial, infrastructure, industrial and materials sectors, as well as Spain. In fixed income, we favour European credit, particularly highly rated high-yield debt”. The most attractive investments, the report continues, are in companies and assets that help address bottlenecks in defence, energy, technology and capital: “We prefer to invest in Europe selectively and thematically in areas where scarcity may emerge and persist.”

Growth prospects
The AI revolution, geopolitical fragmentation and the energy transition are described in the report as “megaforces” that simultaneously affect the macroeconomy and financial markets, reshaping the outlook for growth, inflation and capital allocation.

Against this background, and while the United States remains the epicentre of AI investment and China dominates parts of the energy transition and physical AI, Europe is in the meantime strengthening resilience in critical areas of the economy. This shift is generating a multi-year investment cycle focused on defence, energy, technology and capital, all of which share the need to reduce vulnerabilities, strengthen security and foster greater growth.

Although in Europe’s case BlackRock generally recommends investment in the financial sector above all, it also highlights “the materials and industrial sectors, as both should benefit from European investment in AI, industrial automation, robotics and energy infrastructure”. Indeed, it explains that Europe’s opportunity lies not so much in the development of AI models as in their physical implementation.

^{Photo: BlackRock}