Larry Fink of BlackRock told CNBC on Thursday that he believes the stock market still has room to go higher. However, the president and CEO of the world’s largest asset manager warned that the rally may not be as robust as in the second half of 2020.
“I think we will continue to see the market strong until 2021, probably not as strong as we saw in the fourth or third quarter last year,” Fink told Squawk Box.
The S&P 500 rose more than 20 percent between July 1 and December 31 as part of a massive recovery in shares from the coronavirus-induced sale that took place in February and March.
One factor that should provide a tailwind for the market is the “record” amount of cash that investors have on the sidelines, Fink said.
“We constantly see investors around the world underinvested, not overinvested, in long-term assets, and the best source of long-term assets are stocks and many private asset classes,” he said.
The presence of low interest rates – and the likelihood that an accommodative monetary policy will be in place for some time – will continue to attract investors to the market, Fink said.
Fink said he anticipates that the second half of 2021 will be stronger for the market than the first half, due to the widespread launch of Covid-19 vaccines, allowing a resumption of greater economic activity. It will be “a strong component for future growth,” he added.
BlackRock shares were up more than 1% in premarket trading on Thursday, after the New York company reported better-than-expected fourth-quarter earnings and revenue.
BlackRock’s assets rose to a record $ 8.68 billion at the end of the quarter. It rose from $ 7.43 billion in the same period last year.