BlackRock CEO Larry Fink sees a bright future for the US stock market. "I am incredibly bullish on the markets," the head of the world's largest investment management company said, placing great emphasis on the current trends suggesting an increase in quotes.
According to the expert, there are a number of factors which could push markets higher in the near future. Fink expects key US stock indices to edge up, even though they are already hovering near record highs. The reason for such optimism is massive fiscal stimulus measures adopted by the US authorities, in particular the recent $1.9 trillion rescue package and the Fed’s ongoing quantitative easing program.
The COVID-19 pandemic has dramatically changed consumer behavior around the world, including in the United States. The coronavirus crisis dampened demand for goods and services as consumers tried to save money, Fink noted. However, the stimulus measures allowed citizens of a number of countries to enter the market, and not just to stuff money into bank accounts.
Nevertheless, there are long-term risks to the global stock market, the BlackRock CEO warns. The biggest one is new virus strains which could reduce the effectiveness of the existing COVID-19 vaccines. Another factor posing a threat to equity markets is a surge in government deficit that leads to higher taxes and rising borrowing costs. This scenario may force investors to dump equities and switch to the bond market, the expert sums up.
