BlackRock's Rick Rieder Dismisses Recession Fears, Says Stocks Could Surge Up To 12% In 2024

Stocks could witness a surge of up to 12% this year, with no imminent recession on the horizon, as per Rick Rieder, the Chief Investment Officer of global fixed income at BlackRock Inc BLK, the world’s largest asset manager. His optimistic forecast was delivered on “The Meb Faber Show.”

What Happened: Rieder projected a promising outlook for the financial markets and the U.S. economy, suggesting that the S&P 500 could surpass the 5,300-point mark by the end of the year, reported Business Insider.

“I think equities will do 8% to 10% to 12%,” Rieder said. He lauded the robust performance of Big Tech companies, pointing to their exceptional revenue growth and impressive cash generation.

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He also recommended sectors such as healthcare and defense for investment consideration, hinting at a healthy 10% return on equity annually. Despite his optimistic forecast, Rieder emphasized the need for cautious investment, indicating that the path toward these projected gains may not always be a smooth one. He dismissed recession fears, crediting his confidence to the resilience of the U.S. economy, especially in technology and the service sector.

Why It Matters: Rieder’s positive forecast comes in contrast with some prominent analysts, like the team at LPL Research, who predicted a possible recession for the U.S. economy in 2024. This prediction was based on the belief that consumers struggling with increasing debt burdens will exhaust their excess savings and face challenges in meeting their debt obligations.

Moreover, the “bond king” Bill Gross, co-founder of Pacific Investment Management Co., also warned about the overvaluation of 10-year U.S. Treasury debt and suggested a potential alternative in the form of Treasury Inflation-Protected Securities (TIPS).

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