BlackRock's Rick Rieder: Why Stocks Will Keep Rising Despite High Valuations
BlackRock Executive Predicts Continued Stock Market Rise Despite High Valuations
Rick Rieder, BlackRock’s global Chief Investment Officer of fixed income, has shared his insights on the current state of the equity market, suggesting that stocks are likely to continue their upward trajectory despite high valuations. Rieder attributes this trend to a notable absence of sellers in the market and strong momentum driven by various factors.
According to Rieder, the lack of sellers is a key factor supporting rising stock prices. He points to the continuous influx of money into equities from sources such as retirement accounts and salaries. Additionally, corporate buybacks are playing a significant role in reducing the supply of equities, further bolstering prices.
“Companies have repurchased a trillion dollars worth of their shares,” Rieder stated, highlighting the impact of these buybacks on the market. This reduction in available shares has led to increased per-share values, effectively counteracting concerns about high market valuations.
While current market valuations are near generational highs, with some metrics reaching historical peaks, Rieder suggests that a significant rise in corporate earnings could help normalize market multiples. However, he acknowledges that the current trajectory appears to be upward in the absence of major negative news.
Rieder has previously warned about risks related to US debt and potential market disruptions. Despite these concerns, he believes that debt issues, while important, do not pose an immediate threat to the market. The timeline for potential debt-related market impacts remains uncertain, with Rieder speculating that such effects might not materialize until late 2025 or early 2026.
As investors navigate this complex market environment, Rieder’s insights provide a valuable perspective on the factors driving current trends and potential future developments in the equity market.
