BlackRock’s Larry Fink told CNBC on Thursday that he believes the stock market has even more room to run higher. However, the chairman and CEO of the world’s largest asset manager warned that the rally may not be as robust as in the second half of 2020.
“I think we’ll continue to see the market going strong in 2021, probably not as strong as we saw in the fourth or third quarter last year,” Fink said of “Squawk Box.”
The S&P 500 rose more than 20% from July 1 to December 31 as part of a massive stock recovery following the sell-off of the coronavirus pandemic in February and March.
One factor the market should have in the back is the “record” of cash that investors have on the sidelines, Fink said.
“We are constantly seeing investors worldwide underinvest, not overinvest, in long-term assets, and the best source of long-term assets is equities and many asset classes in the private sector,” he said.
The presence of low interest rates – and the likelihood that accommodative monetary policy will exist for some time to come – will continue to drive investors into the market, Fink argued.
Fink said he expects the second half of 2021 to be stronger for the market than the first half due to the wide roll-out of Covid-19 vaccines, allowing more economic activity to resume. That will be “a powerful part of forward growth,” he added.
Shares of BlackRock were more than 1% higher in premarket trading Thursday, after the New York-based company reported better-than-expected earnings and earnings in the fourth quarter.
BlackRock’s assets under management rose to a record $ 8.68 trillion at the end of the quarter. That’s up from $ 7.43 trillion in the same period last year.