Rick Rieder, BlackRock's CIO of Global Fixed Income, argues for a continuing bull market fueled by strong corporate earnings, buybacks, and cash waiting on the sidelines. He connects the outlook to crypto and tokenized assets, including using them to buy government debt.
The managing director at BlackRock literally just said that the markets will go higher. He's the chief investment officer of global fixed income, and he manages over $2.4 trillion.
Yeah, listen, this is a pretty good investment environment.
I mean, it's a certain level of risk. You said it was like one of the best you've ever seen. That's, that's, that's what you're referring to that went viral.
Listen, I think there's a couple things at play. One, you've got an economy that's operating at a pretty good level, and you've got a Fed that's got to bring rates down, and you've got a dynamic where corporate earnings are pretty good. I mean, the level of earnings, and you're watching productivity happen. Everybody wants to talk about AI, but productivity that's happening, you see it in inventory management, logistics, automation. Customer procurement. Like, I'm pretty blown away.
I want to add to that a little bit because Trump put in tariffs on October 10th and the S&P 500 printed a really nasty candlestick. And ever since then, we broke back up and actually broke all-time high. The SPX is a basket of all the stocks. So when it comes to crypto specifically, you got to comprehend that what stocks do, crypto would do as well. They're both considered risk-on assets. So when he's explaining earnings, he's basically saying that these companies are actually earning money. So when the earnings report comes out, It looks like they're high productivity and they're making money. And then you'll see that he talks about how they're buying their own stock back. Let me show you.
These are pretty impressive. And you have the level of cash that's sitting out there that, you know, my guess is it continues to drive, drive these markets higher.
You want to be a serious bear right now, I suspect your timing needs to be impeccable or the fundamental setup needs to change. Otherwise, you're fighting the Fed and fiscal stimulus and US mega-cap tech. I mean, it sounds like you could have written that.
And the buybacks. I mean, we're witnessing something that is history in terms of these companies throwing off Earnings. And by the way, we talk about is an AI bubble or is this a bubble? I mean, I'm actually going through a presentation where I'm presenting that the cash flow these companies throw off, the free cash flow they throw off, that allows them to do CapEx, allows them to invest in R&D, but then buy back their stock. So you actually are reducing your book equity outstanding and driving your stock higher. It's pretty, it's pretty unbelievable.
Again, I just want to add to that. Look at the S&P 500. We had a bounce back. This is mayhem. Trump put 100% tariffs on China. This took the market down. Big red candlestick at the exact top. I remember being here and I'm like, okay, that looks like a top. Of the market, and we immediately bounce back. What he means by the Federal Reserve and interest rates—it's basically at the end of the month we have the Federal Reserve cut interest rates, which will increase the liquidity. He's talking about cash. He's talking about earnings. He's talking about liquidity. Now, the important part about this guy specifically is the fact that he handles fixed income. So fixed income is like government bonds, corporate bonds, money market instruments, and T-bills. And this is all government debt. Now, the important part about that is that we've been talking about how the Genius Act got passed into law allows banks to. Create stablecoins, and the stablecoin money is used to buy back government debt. So if you notice a trend here, we had the CEO of BlackRock say that they're ditching their old system of traditional finance to take on this new blockchain initiative. And that blockchain initiative is called RWAs, or real-world assets. I do believe we're just at the beginning of the tokenization of all assets, from real estate to equities to bonds. And they're using the RWAs to buy back government debt. If you notice, I've been talking about buying back government debt a lot. And now we have Rick Rieder coming in, which handles $2 trillion worth of fixed income, essentially saying the same exact thing from BlackRock themselves.
