The March low may have been the market bottom, says CEO of the world’s largest money manager
Larry Fink, co-founder of the world’s biggest money management firm, said Thursday the stock market’s low last month may have been the bottom of the panic stemming from the coronavirus pandemic.
“If the disease curve in the developed world continues to decline [and] at the same time we see the curve from governmental support for monetary policy and fiscal policy worldwide increases, we could have seen the bottom,” the BlackRock chairman and CEO told CNBC.
The S&P 500 saw its most recent low of 2,191 on March 23, which marked a decline of 35% from its February record. The index, as of Wednesday’s close, was less than 18% off those highs.
Fink, who appeared on “Squawk Box” shortly after BlackRock reported a 23% drop in first-quarter earnings, warned that the stock market hasn’t fully understood that the virus has mostly hit the developed world.
“As we start entering summer time [in the U.S.], the Southern Hemisphere is beginning to have their winter. And are we going to see an acceleration in the disease in other parts of the world? And does that mean close our borders for a longer period of time?” he asked.
Dow futures opened slightly lower on Thursday. Terrible economic numbers pushed the Dow Jones Industrial Average down 445 points, or 1.9%, on Wednesday. The S&P 500 fell 2.2% and the Nasdaq lost 1.4%. Weak bank earnings also weighed on the market Wednesday.
In Thursday’s interview, Fink also said the U.S. needs to increase its testing capacity for the coronavirus before its economy can restart in earnest.
“It may not be in June or July. It may be in August,” he said, referring to when companies may be comfortable relaxing their work-from-home rules.