BlackRock's Fink expects 'huge' rush into underinvested stock market

(Reuters) - The U.S. economy is speeding up again after a slowdown in recent months and cash could soon start rushing into stocks as most investors are underinvested in the markets globally, BlackRock Inc’s CEO Larry Fink said on Tuesday.

“What we are seeing worldwide are clients just struggling in putting their money to work,” Fink told Reuters in an interview after his company reported Q1 earnings.

“We still saw, as an industry and at BlackRock, outflows in equities and this is one of the reasons why I believe the market is getting set up for huge inflows into equities,” he said.

U.S. stocks stumbled late last year due to fears about a global slowdown and about the potential fallout from U.S.-China trade tensions.

A partial U.S. government shutdown and mixed economic data added to investor concerns earlier this year.

Yet, the benchmark S&P 500 stock index has gained more than 16% in 2019 due to monetary stimulus efforts in China and signs the U.S.

Fed will delay further rate hikes for the time being. BlackRock’s results showed that many investors have kept their money in lower-risk bonds.

BlackRock reported a better-than-expected first quarter profit on Tuesday but shed more than $26B in client assets from stock funds during the first quarter.

Still, those withdrawals were more than offset by a jump in bond fund sales to nearly $80B, from $3B the quarter prior.


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