BlackRock CIO Rick Rieder Sees Sustained Stock Market Bull Run, Names One Equity Group Flashing Solid Fundamentals
BlackRock chief investment officer Rick Rieder believes that the bull run in US equities will continue, driven by higher earnings estimates.
In a new interview at the CNBC CEO Council Summit, Rieder says the market is in the midst of an “extraordinary period of time” as stock prices rise while earnings multiples fall.
While Rieder mentions a few market risks, he says the earnings growth story is fueling the market’s ascent to new all-time high levels.
“I don’t think we’ve ever seen anything like this in terms of you’ve got a market that’s doing extremely well. The cash keeps coming into these markets. And the multiples, though, when you actually look at it relative to where you were, particularly in tech and semis, are actually lower than where we were if you go back to October.
The earnings growth, I was looking this morning at the projected [one-year forward] earnings growth, talking about 20%-plus earnings growth. That is incredible. So yes, there’s a lot of uncertainty. Yes, there are things to be careful about. I worry about crowding in different markets, not just in overall markets, but in single-name stocks where you see more crowding, more momentum trading than I’ve ever seen before.”
The BlackRock CIO says he’s keeping a close watch on the Magnificent 7 names, highlighting that their valuations are justified due to exceptional earnings growth.
“I was looking at the Mag 7. I mean, you’re talking about a 26x multiple for companies that are throwing off earnings growth of 30%-40%.
So yes, there’s a lot of uncertainty. There’s a tremendous amount of cash. There’s a tremendous amount, even with the IPO calendar, which is large. There is still a tremendous amount of buyback going on. So I think the technicals are good. Listen, I think you’ve got to stay in it. And I think the equity market will probably continue to do okay.”
Generated Image: Midjourney
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Federal Reserve meeting minutes: All 19 policymakers support a rate hike in September, but reasons vary; most expect further hikes this year, suggesting no urgency in October.
Most officials view a September interest rate hike as an "insurance" measure against stubborn inflation; a minority see it as a necessary step to curb inflation. Overall, there is no indication of a desire to push for consecutive rate hikes. The "New Fed News Agency" emphasized the minutes: "Most participants believe that it may be appropriate to raise interest rates again before the end of the year." Nearly all officials believe inflation remains elevated and the labor market is close to full employment. Many noted that, despite the rise in long-term U.S. Treasury yields, financial conditions are still conducive to economic growth. Some officials believe that AI will boost investment and productivity, but may also contribute to inflation. The minutes revealed that the U.S.-Japan joint intervention in July to support the yen was a U.S. Treasury action, with no Federal Reserve funds used.
Solana Consolidates After Sharp Expansion
FLOKI Recovery Tests Key Resistance
100 Million Barrels Shrinkage? Reports Say EU Believes Oil Reserve Release Plan Mainly Fulfills Previous Commitments, Not New Quotas
Last Friday, G7 member countries agreed to release up to 100 million barrels of crude oil and diesel reserves. The IEA had announced a plan to release 400 million barrels in March, and as of last Friday, about 75 million barrels had yet to be released. Most EU member states believe that this action is simply fulfilling previous commitments rather than adding new releases. Regarding the earlier-than-scheduled release of diesel stocks emphasized in last week's G7 agreement, EU member states consider it feasible, but on a limited scale.
Crypto prices
More
