Larry Fink, CEO of BlackRock Inc. the world’s largest asset management firm, has joined other high profile investors expressing caution on trade concerns with China that could potentially hurt America’s stock market.
According to Fink, the trade wars pose a looming threat for Wall Street, despite a recent run up in US equity benchmarks.
Fink who spoke in a televised interview monitored by businessamlive on Monday, said stocks could drop between 10 percent and 15 percent should Donald Trump, America’s president follow through with a promise to impose a further $200 billion in levies of 10 percent on China imports.
“The market’s having a hard time digesting the whole change in globalization and trade, the foundations of international trade are being raised and being questioned,” Fink said in a monitored Bloomberg television interview.
The statements align with those Fink made during the asset manager’s second quarter call with analysts to discuss its better than expected results late last week.
“Most significantly, some of the strongest foundational components of international investing are being tested as trade frictions escalate to new levels,” the BlackRock boss had said.
Fink noted that upbeat earnings, which should otherwise lift stocks, are being offset by the hand wringing in the C-suite about the potential for an intensification of disputes over global trade that has rattled investors in the past several months.
“Strong earnings and the US economic growth unfortunately are being offset by heightened uncertainty due to rising protectionism and potential barriers to the open markets and free trade that have for years supported global economic growth and the expansion of international markets. These circumstances are impacting markets, exchange rates and global capital flows,” he said.
Fink also said that he sees the market at a “pivotal point” that has caused investors to hold off on business investments. “We are at a pivotal point. Clients are struggling to better understand increased risk and uncertainty and market dynamics are shifting causing those clients to pause as they think about the future,” he said on the analyst call.