BlackRock’s Larry Fink told CNBC on Thursday that he believes the stock market has more room to rise. However, the president and CEO of the world’s largest asset manager warned that the recovery may not be as robust as it was in the second half of 2020.
“I think we will continue to see the market strong in 2021, probably not as strong as we saw in the fourth quarter or the third quarter of last year,” said Fink in the “Squawk Box”.
The S&P 500 rose more than 20% from July 1 to December 31 as part of a massive recovery in stock from the settlement induced by the coronavirus pandemic that occurred in February and March.
One factor that should provide a favorable wind for the market is the “record” amount of money that investors have on the sidelines, said Fink.
“We are constantly seeing investors around the world underinvested, not overinvested, in long-term assets, and the best source of long-term assets are stocks and many categories of assets in the private sector,” he said.
The presence of low interest rates – and the likelihood that an accommodative monetary policy will remain in place for a while – will continue to attract investors to the market, said Fink.
Fink said he anticipates that the second half of 2021 will be stronger for the market than the first, due to the widespread launch of Covid-19 vaccines, allowing for more economic activity to resume. This “will be a powerful component for future growth,” he added.
BlackRock’s shares rose more than 1% in Thursday’s pre-market after the New York-based company reported better-than-expected earnings and revenues in the fourth quarter.
BlackRock’s assets under management skyrocketed to a record $ 8.68 trillion at the end of the quarter. This represents $ 7.43 trillion in the same period last year.