Tags: Fink | stocks | Fed | Europe

BlackRock's Fink: 'I'm Pretty Optimistic' on Stocks Because of 'Meltdown'

By    |   Wednesday, 15 October 2014 10:48 AM

The drop in U.S. stocks caused by the economic slowdown in Europe and the plunge in oil prices presents a buying opportunity, says Larry Fink, CEO of BlackRock.

The S&P 500 index has dropped 8 percent from its Sept. 19 record high, standing at 1,859 Wednesday morning. Meanwhile, the CBOE Volatility Index (VIX) has soared 88 percent since then.

"We were so complacent," Fink tells CNBC. "The fear level may be appropriate for this moment. . . . People are very worried about global growth and certainly the uncertainty of Europe is growing. . . . We are seeing a meltdown in oil and petroleum markets."

But the drop in oil prices represents a "huge tax cut for the world, . . . an early Christmas present for American consumers. We're going to see a 30 percent to 40 percent decrease at the pump right into the Christmas season. So it should be good for U.S. retailers," he notes.

"But the negativity today, it's just so pervasive, people are unwinding positions, people are frightened."

Much of the decline in stocks stems from "fast money" exiting the market, Fink explains. "I'm pretty optimistic because of this meltdown. If individual investors can tolerate this type of volatility," the stock market presents them with an opportunity, he adds.

Fink believes the Fed will start raising rates "sometime early next year."

"I actually believe for the world economies, the U.S. Federal Reserve needs to raise rates. I think if they don't raise rates, the world economies are harmed because the world economy, especially Europe, needs a weaker currency.

"No place is a better place to invest than the United States.

Meanwhile, several strong third-quarter earnings reports haven't been sufficient to improve investor sentiment.

"The global outlook is overshadowing positive third-quarter corporate earnings reports in the U.S.," Doug Cote, chief market strategist at Voya Investment Management, tells The Wall Street Journal.

"The third quarter is looking really good, but that's kind of [in the] rearview mirror at this point. I'm concerned about what these global growth concerns mean for the fourth quarter."

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The drop in U.S. stocks caused by the economic slowdown in Europe and the plunge in oil prices presents a buying opportunity, says Larry Fink, CEO of BlackRock.
Fink, stocks, Fed, Europe
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2014-48-15
Wednesday, 15 October 2014 10:48 AM
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