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Rick Rieder, BlackRock (NYSE:)’s Global Fixed Income CIO and leader of the Global Allocation team, has projected a 2.5% real GDP growth for the U.S. economy this year and a further 1.5% increase next year, despite an anticipated economic slowdown. Rieder made these remarks on CNBC’s “ETF Edge”, where he likened the U.S. economy’s resilience to the flexibility of polyurethane or a Tempur-Pedic bed, emphasizing its ability to recover from substantial shocks.
Rieder, who was named Morningstar’s 2023 Outstanding Portfolio Manager, expressed a preference for the U.S. investment landscape over Europe, citing Europe’s accelerated economic slowdown. He also discredited antiquated economic cycles and predicted continued investment in equities despite the current high demand for Treasury bonds.
Although he does not foresee 25% returns, Rieder asserted that equities will continue to play their role, particularly if interest rates dip in the second half of 2024. He suggested that such a decrease in rates could create a tailwind for the equity market through yield curve normalization.
Rieder also highlighted stocks from what he termed the “Magnificent Seven” trading at “three, four or five times cash flow” as attractive investments, especially those in stable businesses. This is under the assumption that multiples will remain unchanged.
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