BlackRock chief financial officer Rick Rieder believes the bull run in the US corporate sector will continue, led by higher earnings estimates.
In a recent interview at the CNBC CEO Council Summit, Rieder he says the market is in the middle of a “shock period” when stock prices are rising while profits are falling.
While Rieder cites a number of market risks, he says the economic growth story is driving the market to a new all-time high.
“I don’t think we’ve seen anything like this in terms of you have a market that’s doing very well. Money just keeps coming into these markets. And the leverage, however, if you look at it relative to where you were, especially in tech and semis, it’s actually lower than where we were if you went back to October.
Earnings growth, I looked this morning at projected earnings growth (one year ahead), and I’m talking about 20%-plus earnings growth. That is unbelievable. So yes, there are many uncertainties. Yes, there are things to be aware of. I’m worried about the overcrowding in different markets, not in all markets, but in one type of market where you’re seeing more and more, sales are going up more than I’ve ever seen before.
BlackRock CIO says he is keeping a close eye on the names of the Magnificent 7, highlighting that their valuation is justified due to exceptional growth in profits.
“I was looking at Mag 7. I mean, you’re talking about 26x multiples of companies that are losing 30%-40% growth.
So yes, there are many uncertainties. There is a lot of money. There is a lot, even with the IPO calendar, which is huge. There is also a large amount of refunds going on. So I think technology is good. Listen, I think you should be in it. And I think the equity market will probably continue to do well. “
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