BlackRock/iShares - Weekly Investment Commentary: Cheering, Not Fearing, a Rate Hike?

Weekly Commentary Overview
- Last week, investors once again focused on central bank policy.

- The twist is that investors celebrated the potential for more divergence: tightening by the Federal Reserve (Fed) while the European Central Bank (ECB) pursues easing.

- Investors now appear to be treating a December rate hike by the Fed as a sign of economic stability rather than something to be feared.

- In Europe, the story remains somewhat different. European equity markets also rallied, but the catalyst continues to be hope for more monetary stimulus, rather than signs of economic recovery.

- The implications for investor positioning: We would suggest a continued overweight to hedged European equities while in the U.S. adopting a modest tilt toward large- and mega-cap stocks.