Larry Fink of BlackRock told CNBC Thursday that he believes the stock market has more room to grow. However, the president and CEO of the world’s largest asset manager warned that the merger may not be as robust as the second half of 2020.
“I think we’ll continue to see the market be strong until 2021, probably not as strong as we saw in the fourth quarter or third quarter of last year,” Fink told Squawk Box.
The S&P 500 rose more than 20% from July 1 to December 31 as part of a massive equity recovery from the sales induced by the coronavirus pandemic that occurred in February and March.
One factor that should provide a headwind to the market is the “record” amount of cash investors have on the margin, Fink said.
“We are persistently seeing investors around the world investing, not excessively, in long-term assets, and the best source of long-term assets are equities and many categories of assets in the private area,” he said.
The presence of low interest rates and the likelihood that the accommodative monetary policy will be in place for some time will continue to drive investors into the market, Fink said.
Fink said he predicts the second half of 2021 will be stronger for the market than the first half due to the widespread deployment of Covid-19 vaccines, which will allow the resumption of increased economic activity. This “will be a powerful component for future growth,” he added.
BlackRock shares were up more than 1% in pre-market trading after the New York-based firm reported better-than-expected earnings and revenue in the fourth quarter.
BlackRock’s managed assets rose to a record $ 8.68 trillion at the end of the quarter. That exceeds $ 7.43 trillion from the same period last year.