Tags: Fink | stocks | correction | bonds

BlackRock’s Fink: Stocks Have More Room to Rise

Wednesday, 17 Apr 2013 08:30 AM

By Dan Weil

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The stock market, which hit record peaks earlier in April, will end the year higher, says Larry Fink, CEO of BlackRock, the world’s biggest money manager.

Positive fundamentals will dictate the move, he tells CNBC. About 85 percent of the companies that have reported first-quarter earnings have topped analysts’ estimates, he says.

“It’s an indication of a stronger economy. It’s an indication of corporations managing their expenses properly. It does validate my long-term view.”

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

BlackRock enjoyed a record inflow of $33.7 billion into its stock funds during the first quarter. “What we’ve seen from the beginning of the year is that clients are putting cash to work,” Fink explains.

“Most of that money came from cash. We didn’t see a rotation from bonds to equities. We saw a persistent demand for equities." And Fink thinks that demand will continue.

Equity investors have been particularly interested in United States, Japanese and Mexican stocks, he notes. They’ve also been interested in stocks that look like bonds — stocks with high dividends, and they’ve been interested in bonds that look like stocks — junk bonds.

Although he believes the stock market will rise by the end of the year, a correction wouldn’t be surprising, he says. And a 5 percent correction would represent a good buying opportunity, Fink adds.

Other experts see a promising backdrop for stocks also.

“There is an economy in the U.S. which we don’t see going into recession, corporate profitability is in a maturing cycle but continues to come in positive, and the Federal Reserve’s accommodative,” Stephen Wood, chief market strategist at Russell Investments, tells Bloomberg.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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