Stocks prices are too high given the continued threat of the coronavirus pandemic, BlackRock CEO Larry Fink said on Thursday, according to CNBC.
Current valuations don’t reflect soaring numbers of coronavirus cases, lasting damage to small businesses, and continued pressure on corporate earnings, Fink said during a virtual panel of the World Goverment Summit.
“The market is probably a little ahead of itself at this time,” the billionaire boss of the world’s largest asset manager said.
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Investors are shrugging off a resurgence of coronavirus cases and underestimating the pandemic’s financial fallout, BlackRock CEO Larry Fink said on Thursday, according to CNBC.
“The world is accepting higher infection rates,” the billionaire boss of the $7 trillion asset manager said on a virtual panel of the World Government Summit.
“Yesterday we had the highest infection rate in the world and markets are still pretty stable,” he continued, referring to the record 36,000 new COVID-19 cases reported in the US on Wednesday.
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Fink also highlighted the outbreak’s brutal impact on smaller employers in the US, CNBC reported. More than 100,000 small businesses could permanently close, based on a survey of 5,800 businesses in late March, which found 1.8% had shut down for good.
“The market is probably a little ahead of itself at this time, because I still believe we are witnessing real tragedies in the small and medium businesses,” Fink said.
The BlackRock chief added that stock valuations are pricing in a rebound in corporate profits next year that few executives anticipate.
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“Only a fraction of business leaders believe their business will be as robust as in 2019,” he said. “The marketplace is not saying that.”
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Source:: Business Insider