Larry Fink, BlackRock, told CNBC on Thursday that he believes the stock market has further room to be higher. However, the chairman and CEO of the world’s largest asset manager have warned that the protests may not be as strong as in the second half of 2020.
“I think we are going to continue to see that the market will be strong in 2021, probably not as strong as we saw in the fourth quarter or third quarter last year,” Fink said on ‘Squawk Box’ .
The S&P 500 rose more than 20% from July 1 to December 31 as part of a major recovery in shares of the coronavirus pandemic-induced sale that took place in February and March.
One factor that would provide the wind of the market is the ‘record’ amount of cash that investors have on the sidelines, Fink said.
“We are constantly seeing investors worldwide underinvesting, not investing too much, in long-term assets, and the best source of long-term assets are equities and many asset classes in the private sector,” he said.
The presence of low interest rates – and the likelihood that an accommodative monetary policy will continue for some time to come – will continue to drive investors to market, Fink said.
Fink said he expects the second half of 2021 for the market to be stronger than the first half due to the broad deployment of Covid-19 vaccines, which could resume more economic activity. It will be a powerful component for future growth, ‘he added.
Shares of BlackRock rose more than 1% in the pre-trading market on Thursday after the New York business reported better-than-expected earnings and revenue in the fourth quarter.
BlackRock’s assets under management rose to $ 8.68 trillion at the end of the quarter. That is higher than $ 7.43 trillion in the same period last year.