BlackRock CEO: "Tens of Trillions of Dollars Remain on the Sidelines"
Uncertainty surrounding U.S. President Donald Trump's tariff policies is causing volatility in Wall Street's outlook for the U.S. stock market.
According to Bloomberg News on May 13 (local time), market research firm Yardeni Research raised its year-end forecast for the S&P 500 index from 6,000 to 6,500 following the announcement of a U.S.-China tariff agreement the previous day.
Until last year, Yardeni Research had set its year-end target for the S&P 500 at 7,000. However, due to uncertainty stemming from President Trump's tariff policies and concerns over an economic recession, the firm lowered its target twice since March.
Goldman Sachs also raised its year-end target for the S&P 500 from 5,900 to 6,100 the previous day. Goldman Sachs had also forecast a year-end target of 6,500 for the S&P 500 until last year, but lowered its target twice since March before raising it back to 5,900.
Regarding the frequent changes in market forecasts, Ed Yardeni, founder of Yardeni Research, explained, "I told clients that we would change our forecasts as often as President Trump changes his mind."
The U.S. stock market rallied after President Trump's election victory in November last year on expectations of tax cuts and deregulation. However, after the start of Trump's second term this year, concerns over a recession driven by comprehensive tariff policies have come to the fore, leading to a sharp decline.
On this day, the S&P 500 closed at 5,886.55, up 0.72% from the previous session, turning its year-to-date return positive.
Larry Fink, CEO of BlackRock, the world's largest asset management firm, said at an event that tens of trillions of dollars are sitting in cash-like assets amid uncertainty surrounding the U.S. economy and fears of a trade war. Fink stated, "There are 12 trillion euros in European bank accounts and 11 trillion dollars in U.S. money market funds (MMFs)," adding, "When there is uncertainty, people tend to hold more funds in cash, and that is exactly what is happening now."
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