BlackRock's Fink expects 'huge' rush into underinvested stock market

By Saqib Iqbal Ahmed and Trevor Hunnicutt NEW YORK (Reuters) - The U.S.

Reuters April 17, 2019 00:06:19 IST
BlackRock's Fink expects 'huge' rush into underinvested stock market

BlackRocks Fink expects huge rush into underinvested stock market

By Saqib Iqbal Ahmed and Trevor Hunnicutt

NEW YORK (Reuters) - The U.S. economy is speeding up again after a slowdown in recent months and cash could soon start rushing into stocks as most investors are underinvested in the markets globally, BlackRock Inc's Chief Executive Larry Fink said on Tuesday.

"What we are seeing worldwide are clients just struggling in putting their money to work," Fink told Reuters in an interview after his company reported first-quarter earnings.

"We still saw, as an industry and at BlackRock, outflows in equities and this is one of the reasons why I believe the market is getting set up for huge inflows into equities," he said.

U.S. stocks stumbled late last year due to fears about a global slowdown and about the potential fallout from U.S.-China trade tensions. A partial U.S. government shutdown and mixed economic data added to investor concerns earlier this year.

Yet, the benchmark S&P 500 stock index has gained more than 16 percent in 2019 due to monetary stimulus efforts in China and signs the U.S. Federal Reserve will delay further rate hikes for the time being. BlackRock's results showed that many investors have kept their money in lower-risk bonds.

BlackRock reported a better-than-expected first quarter profit on Tuesday but shed more than $26 billion in client assets from stock funds during the first quarter. Still, those withdrawals were more than offset by a jump in bond fund sales to nearly $80 billion, from $3 billion the quarter prior.

"People are still under-risked despite the big rebound," Fink said.

The BlackRock chief executive said he thought the rebound would help his portfolio managers' performance, too.

The company reported on Tuesday that just 27% of the assets in its computer-assisted "systematic" stockpicking funds were beating their benchmark over a one-year period. That compares to 87% of those assets outperforming over five years. Fink said these funds' performance was improving in the current market climate.

(Reporting by Saqib Iqbal Ahmed; Editing by Bernadette Baum)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son