Strong support from accommodative central banks across the globe and potentially another large round of fiscal stimulus both in the United States and Europe mean financial markets have more upside than downside, BlackRock Inc Chief Executive Larry Fink said on Tuesday.
Globally, investors remain under-invested, Fink said in an interview.
"With central banks’ behaviors being very accommodative, with I believe, another very large round of fiscal stimulus in the United States and Europe these are the great foundational reasons why markets have more upside than downside,” Fink said.
Financial markets rallied in the third quarter, extending the second quarter’s dramatic rebound from a pandemic-fueled low hit in March, as accommodative global central banks and improving growth prospects lifted risk appetite. The S&P 500 rose 8.5 percent for the quarter ended Sept. 30.
Despite parts of the economy rebounding strongly from the shock of the coronavirus pandemic, there remains a need for fiscal stimulus, Fink said.
"We are seeing a very uneven economy," he said.
"I am a firm believer we have a strong need for a very directed, targeted stimulus," he said.
"The stimulus is not going to be broad-based because there are major segments of the economy that are doing very well and there are components of the economy that are doing poorly."
Republicans and Democrats in Congress have been unable to agree on how much new cash the federal government should give out, who it should go to, or how any new bill should combat the coronavirus pandemic.
U.S. House Speaker Nancy Pelosi rejected President Donald Trump’s latest offer on COVID-19 stimulus on Tuesday, in the latest sign that a bipartisan deal on coronavirus relief remains unlikely ahead of the November election.
On Tuesday, BlackRock Inc’s quarterly results beat analysts’ estimates helped by broad-based strength in its businesses.