Latest news with #RickRieder
Yahoo
9 hours ago
- Business
- Yahoo
Takeaways from Day One at the Morningstar Investment Conference
You can find original article here Wealthmanagement. Subscribe to our free daily Wealthmanagement newsletter. The first day of the annual Morningstar Investment Conference in Chicago this week showcased executives from two of the largest asset managers in the nation, providing insights into where the firms see opportunities for growing their business. The day opened with comments from Rick Rieder, managing director, CIO of Global Fixed Income, BlackRock, who sketched out the firm's convictions on the macroeconomy. Rieder conveyed his belief that, long term, robotics and AI would bring about revolutionary changes. In the near term, he predicted the U.S. would land at effective tariff rates at around 15%, which would lead to a burst of short-term inflation that would then level off, in part after the Fed undertakes a series of rate cuts later this year and next year. He also predicted that the U.S. economy, because of its heavy reliance on services rather than manufacturing, would prove resilient to tariff effects and continue to post nominal growth. 'You don't have to take a lot of credit risk,' Rieder said. 'You can be in fixed income at the front end of the curve and throw out a 6% return. It's a golden age not because you can make a lot of money based on interest rates, but because you can compound income above the rate of inflation. You don't have to go down into emerging markets. You can go down the middle and get a lot of yield.' Later in the day, Vanguard CEO Salin Ramji discussed how the firm, famous for its low fees on investment products—what Morningstar has dubbed the 'Vanguard effect'—is looking to provide similar value to investors on savings accounts and financial advice. 'People today get less than 0.5% from banks on savings,' Ramji said. 'We are paying 3.65%. Before someone becomes an investor, they start as a saver, and we want to offer a fair deal on that.' On advice, Vanguard charges 15 basis points for digital advice and 30 basis points for advice with a person. 'There are fewer advisors out there while there's a greater need for advice,' he said. 'Barring a better solution, advice will become the preserve of the wealthy. We want to be able to provide advice to everyday investors.' He pointed to the fact that the average Vanguard investor invests $200,000, but the median was $60,000—those who are traditionally not served by financial advisors. 'When you think about the 'Vanguard effect,' part of what we have been doing is to lower fees and part of it is to introduce more price competition in the industry, which lowers fees for all investors,' he said. 'We are proud of both of those things and want to apply that to different vehicles.' Ramji also provided an update on the firm's partnership with Blackstone and Wellington Management Co. to launch a fund that will invest in public equities, bonds and private markets. 'We're in early days, but we're motivated because we think that private markets done well for the right clients at the right price can be additive to portfolios,' he said. 'But we are also patient and understand that these things take time. We are learning, experimenting and partnering to see how to do it the right way to serve clients well.'
CNBC
12 hours ago
- Business
- CNBC
Traders head into the second half of the year with stocks at all-time highs, jobs report pending
Next week kicks off a new trading month as well as the back-half of 2025, and Wall Street will be watching to see if stocks keep up their recent than momentum. Stocks have made a massive comeback after seeing steep declines in early April, when investor anxiety around President Donald Trump's sweeping tariff policy put the S & P 500 near bear market territory . On Friday, the S & P 500 rose to a fresh all-time intraday high , spurred by optimism that trade deals with China and other U.S. trading partners would be announced soon. The three leading indexes are on pace to close out the first half of the year with solid gains. The S & P 500 as well as the Nasdaq Composite are up more than 5% year to date, while the Dow Jones Industrial Average has advanced more than 3%. .SPX YTD mountain S & P 500, year-to-date Yet, some on the Street, such as BlackRock's Rick Rieder, are already projecting that the market could surge even higher in the year's second half. That's because the artificial intelligence revolution could bring down inflation , thereby sending the market higher, he said Wednesday during a keynote speech at the Morningstar Investment Conference. July 'fireworks'? Supporting a sustained rally, the market is also entering a historically strong month. July has been a positive one for the S & P 500 for the last 10 years straight and is the index's best month over the last 20 years, according to Ryan Detrick of the Carson Group. He also noted that July is the best month in a post-election year. "When you're higher in May and June like we're probably going to be with June, because we're up pretty good, July does better, and the final six months of the year have been higher 15 of the last 16 times," the firm's chief market strategist said Thursday on CNBC's " Worldwide Exchange ," noting that his word of the day is "fireworks." "When these weak months are strong, like we're doing right now, that could be a signal this bull market is alive and well." However, others are more skeptical that July will be smooth sailing for the market, seeing that Trump's 90-day tariff pause is set to expire on July 9. While the White House said Thursday that the deadline " is not critical " and that "perhaps it could be extended," the ensuing uncertainty around it could pose a risk. "Elevated macroeconomic and policy uncertainty suggests that equity volatility should remain high in H2, with multiple potential catalysts for volatility such as the July tariff deadlines," Goldman Sachs analyst Andrea Ferrario wrote in a Thursday note. On top of that, current valuation levels could signal the market may be getting ahead of itself. The S & P 500 currently trades at 23.3 times earnings, per FactSet. By comparison, the index's forward price-to-earnings ratio at the peak of the dot-com bubble was at 24.4 times earnings, as said by DataTrek co-founders Nick Colas and Jessica Rabe in a recent post on X . "A bullish call on U.S. large caps therefore requires believing that we can get to 1999-type valuations," they wrote. "The good news is that 2025 has a much more positive setup than 1999 (rate cuts, cheaper oil, greater S & P Tech exposure). Even still, current valuations reflect a full glass of optimism." Jobs on deck At this point, significantly more gains for stocks depend on the U.S. economic environment remaining rather stable, said Anthony Saglimbene, chief market strategist at Ameriprise. That will come especially into view next week. With U.S. markets closed Friday and a shortened trading day Thursday due to Independence Day, a slew of economic data is set to be released Thursday morning, including June's nonfarm payrolls reading. Economists polled by Dow Jones are expecting the report to show 115,000, per FactSet, down from the previous month's reported growth of 139,000 . "I think the most important kind of data to look at right now, and especially since next week we're going to get some of it, is employment," Saglimbene told CNBC. "The only time that consumers really pull back is when they fear they're going to lose their job or they've lost their job, and if we see employment data kind of remain firm, it's unlikely they're going to materially alter their spending, which is a positive for the economy, even with all of this uncertainty around trade and tariffs." Tuesday 9:45 a.m.: S & P Global manufacturing PMI (June) 10 a.m.: ISM Manufacturing (June) 10 a.m.: JOLTS (May) Wednesday 8:15 a.m.: ADP employment report (June) Thursday 8:30 a.m.: Nonfarm payrolls (June) 8:30 a.m.: Initial jobless claims (Week ended June 28) 8:30 a.m.: International trade (May) 9:45 a.m.: S & P Global services PMI (June) 10 a.m.: ISM services (June) 10 a.m.: Factory orders (May) U.S. stock market closes at 1 p.m. Friday U.S. markets closed for Fourth of July holiday
CNBC
a day ago
- Business
- CNBC
S&P 500 futures are little changed as benchmark closes in on all-time high: Live updates
Traders work at the New York Stock Exchange on June 23, 2025. NYSE S&P 500 futures sat near flat Thursday night with investors on all-time high watch and awaiting inflation data. Futures tied to the broad index traded around their flatline, as did Nasdaq 100 futures . Dow Jones Industrial Average futures added 33 points, or 0.1%. Thursday night's action comes as traders wait to see if the S&P 500 can rise to new records. The broad index climbed 0.8% to finish the trading day at 6,141.02, bringing it only a few points away from the intraday all-time high of 6,147.43 reached in February. The Nasdaq Composite jumped nearly 1%, also coming within striking distance of a fresh record. The Dow popped about 0.9%. "The markets were in a sense of stasis," said Rick Rieder, BlackRock's chief investment officer for global fixed income, on CNBC's "Closing Bell." "There is so much money that wants to come into the market that didn't for a while. And I just think if you don't have any negative news, the natural gravitational pull is across all these assets." Those gains have pushed the Dow and S&P 500 up more than 2% this week. The Nasdaq has jumped more than 3%. Investors will watch Friday for data from the May reading of personal consumption expenditures price index due in the morning. Economists polled by Dow Jones expect the index to tick 0.1% higher on the month and 2.3% from a year ago. So-called core PCE is slated to rise 0.1% from April and 2.6% from 12 months earlier. Beyond the inflation reading, traders will also monitor data on personal income, consumer spending and consumer sentiment. Futures tied to the Dow, S&P 500 and Nasdaq 100 all sat near flat shortly after 6 p.m. ET. — Alex Harring
CNBC
3 days ago
- Business
- CNBC
Why BlackRock's Rick Rieder is confident in equities in the second half as S&P 500 nears high
CHICAGO — BlackRock's Rick Rieder is confident a stock market nearing all-time highs can go even higher in the second half of 2025, as inflation comes down because of artificial intelligence. "I think it's the greatest technology revolution ever. So, what does it mean? My personal view, inflation is coming way down," Rieder said Wednesday during a keynote speech at the Morningstar Investment Conference. The investment chief of global fixed income said he expects the productivity gains to be made from artificial intelligence will offset any hit to inflation from tariffs, which he said will be a one-time adjustment for the U.S. economy rather than a lingering challenge. He added that the U.S. economy is unlikely to fall into a recession, given its reliance on services for growth, rather than goods — which are more cyclical. Rieder's comments come as the S&P 500 trades less than 1% below its record high set in February. While the market still contends with several macroeconomic challenges, including a tenuous ceasefire in the Middle East, and higher tariffs that will likely pressure the U.S. dollar, he remains stocks will surmount those challenges. "The S&P 500 returned almost the entire market cap of the DAX in 2024," Rieder told investors. "When I talk to international investors ... they're going to diversify away from Treasurys to some extent, but they're not going to diversify away from U.S. equities because there's no other game in town." To be sure, Rieder thinks some investors will be disappointed with monetary policy in 2025, noting he expects the Federal Reserve to cut rate just twice this year starting in September — as it works through the temporary impact of higher tariffs.
Yahoo
28-05-2025
- Business
- Yahoo
2 trades BlackRock bond chief Rick Rieder told us he's making to help generate almost 7% yield
Rick Rieder sees bond market volatility as an opportunity amid economic policy shifts. He said short-duration Treasurys offer attractive yields as rate-cut expectations adjust. European high-yield bonds are appealing because of lower volatility and favorable currency swaps. It's been a particularly busy start to the year for BlackRock's bond chief, Rick Rieder — not that someone overseeing $3 trillion in assets has all that much spare time to begin with. The economic policy uncertainty that President Donald Trump has introduced has sent the bond market flailing in a way Rieder hasn't seen before. But the volatility isn't necessarily a bad thing. "There is change afoot. One of the great things about investing in this environment is it's not static," Rieder told Business Insider. "The reaction function to any piece of news can be really extreme," he added. "So markets go through these periods of illiquidity, and it just presents these great opportunities that, by the way, may only be there for 10 minutes, or an hour, or a day. But I've never seen markets move to such extremes." Rieder shared a few of those opportunities he's leaning into at the moment in his iShares Flexible Income Active ETF (BINC), which yields 6.6% and has grown to $9 billion in assets since launching in May 2023. One of them is the front end of the yield curve, or short-duration Treasurys. Yields on the two-year note had dropped from 4.3% last year to 3.6% in April as investors started to price in as many as five rate cuts from the Federal Reserve. But as rate-cut expectations have fallen, yields have risen back up to nearly 4%, making them more attractive. Front-end bonds also offer a hedge for economic volatility in the short term, allowing investors to clip a robust coupon without being locked in for too long. The long end of the curve, meanwhile, isn't acting as a recession hedge, Rieder said, with investors worried about inflation from tariffs and rising yields thanks to ballooning fiscal spending deficits. "I'd rather keep yield up and not have to worry about the volatility," Rieder said. "The long end is not a hedge," he added. "Its traditional offsetting risk function doesn't work today, and so until yields move significantly higher, I don't see any significant reason to own longer in interest rates." Long-end rates in Europe, however, are more attractive, Rieder said. He said he's betting on European B- and BB-rated high-yield bonds to deliver higher yields. This is because economic growth is slowing to a greater degree in Europe than in the US, and inflation is tamer, so the European Central Bank is likely to cut rates more aggressively. This has meant limited upside volatility for European rates. For example, while 10-year Treasury yields have surged from 3.99% to 4.43% since April 4, 10-year eurozone bond yields have been virtually flat, falling by just 3 basis points from 3.13% to 3.1%. When yields rise, bonds lose their value, and vice versa. "Taking some of your interest-rate risk in Europe versus the US — particularly versus long US — has been an exciting thing to be involved with," Rieder said. "Usually, US and European rates move together," he added. "Now you're seeing historic movements of European rates relative to the US, meaning European rates are much more stable." Plus, the dollar's weakness relative to the euro is icing on the cake. "Because of the cross-currency swap, you could buy Europe and you get a couple of percent of additional yield," Rieder said. To mitigate the downside risk of some of the higher-yield bonds in his portfolio, Rieder pairs them with high-quality assets like AAA collateralized loan obligations, he said. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
