BlackRock/iShares - Tread Carefully Even as Stocks Run

Weekly Commentary Overview
- U.S. stocks posted strong gains last week, hitting their highest level since mid-August.

- While third quarter earnings have been roughly in line with estimates, several marquee names have been turning in better-than-expected numbers. We have also witnessed another round of mergers, with two large transactions in tech. Also, the European Central Bank indicated it may extend its current quantitative easing program.

- Despite prospects for a modest acceleration in growth, monetary accommodation, both in and outside the United States, can probably carry markets through year's end. That said, investors need to take note of a few trends.

- First, investors are growing increasingly choosy. Second, the possibility of more QE from Europe may turn out to be a mixed blessing. Third, leadership among sectors is shifting. Finally, investors need to take note of falling expectations for 2016 earnings.

- In this environment, we continue to be cautious on momentum names and see the best opportunities in technology and, outside of the U.S., European equities.