Money managers at the virtual Milken 2020 Global Conference were largely bullish about stocks, but they outlined a litany of risks facing investors.

Uncertainty on multiple fronts is leaving investors trying to position for a range of outcomes—even the possibility of burgeoning debt loads leaves the U.S. facing a systemic financial crisis or a move toward socialism.

The annual conference, sponsored by former junk-bond investor Michael Milken’s Milken Institute think tank, brings together business leaders, policy makers, money managers, and Wall Street power brokers and is taking place online through Oct. 21.

Myriad uncertainties created by the variance in how countries were dealing with the pandemic, populism, geopolitical tensions, and broader divisiveness are forcing investors to grapple with an array of outcomes as varied as a multidecade growth slump or 1970s-style stagflation and requires “an enormous” amount of diversification, said Bridgewater Associates CEO David McCormick.


Carlyle Group

CEO Kewsong Lee called out the uneven nature of the recovery, even within asset classes and sectors. And while the 2008-09 financial crisis saw a lot of solvent companies become illiquid, the massive stimulus this year has left a lot of insolvent companies that are liquid—including many in industries with existential issues ahead, Lee said. That requires caution as investors look through battered industries.

A lot depends on the trajectory of the virus, but Agnès Belaisch, Barings Investment Institute’s chief European strategist, played down the magnitude of the risk posed by recent rise in Covid-19 cases in Europe. At the beginning of the crisis, about 40% of the population was furloughed, but that is now down to just 6%. “It’s a slow process, but a process back to normal,” Belaisch said. She argued that European policy makers’ ability to get monetary and fiscal policy through without talk of austerity and a focus on



a man wearing glasses and looking at the camera: Shannon Stapleton/Reuters


© Shannon Stapleton/Reuters
Shannon Stapleton/Reuters

  • BlackRock CEO Larry Fink told CNBC on Tuesday stocks have more upside ahead and most investors should put more money to work in the market.
  • “I believe we still have more to go on the upside even in front of probably rising infection rates with COVID-19,” Fink said. 
  • With interest rates lower for longer and the likelihood of a second fiscal stimulus, Fink expects the market to move higher.

BlackRock CEO Larry Fink told CNBC on Tuesday that stocks have more upside ahead and investors should put more money to work in the market. 

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“We have a strong conviction that the average investor still is under-invested and they’re going to have to be putting more and more money to work over the coming months and maybe even years,” Fink said. “I believe we still have more to go on the upside even in front of probably rising infection rates with COVID-19.” 

The CEO of the world’s largest asset manager said that he’s not concerned about markets, citing the Federal Reserve’s plan to keep interest rates lower for longer, and saying he expects the US will see another fiscal stimulus “whether it occurs this month or in January.” He added that even as coronavirus infection rates rise, hospitalizations are falling. 

Read more: Good deals in pandemic-hit companies are proving hard to find. Here’s how big investors that raised billions to pounce on corporate distress are changing up their playbooks.

Another factor likely supporting the stock market’s climb upward is the record amount of retail participation, Fink said. He added that the coronavirus pandemic likely caused this surge in individual investing activity.

Fink told CNBC: “You report a lot about Robinhood and the day traders but across the board the average investor is putting more

OUTSIDE THE BOX



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A long-awaited stock-market rotation back to value stocks might benefit oil and gas companies in the short-term, but long-term there are concerns about the sustainability of the energy industry as it now exists. The sector’s woes are such that at the end of August 2020, energy stocks accounted for just 2.6% of the S&P 500 (SPX) , down from more than 16% in 2008. 

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The systemic risk surrounding energy companies due to climate change underscores the difference in approach between active managers and their index-fund counterparts and large retirement funds, as well as the tools active managers can use to make a persuasive case for meaningful change. While active fund managers increasingly are avoiding the energy sector and its risk of permanent capital impairment, many passive-fund investors recognize that as universal owners of the market and, by default, the economy, they have a stake in encouraging a successful energy-sector transition to renewables.

Eschewing the entire industry is short-sighted and misguided. While some investors have divested from fossil fuels, many continue to hold these investments in the hope of driving change through engagement. Active managers, drawn by seemingly low valuations, are engaging alongside them, with the combined weight of their collective voices leading to better reporting and some shift in strategy towards redirecting capital expenditure to renewables. The challenge will be if the change being supported by engagement will be enough to avoid fossil fuel stocks becoming “value traps.”

Read: This is the hottest social issue that U.S. companies are discussing

Active managers have distinct advantages when it comes to proxy voting and engagement, the most obvious being that active managers have a far smaller number of securities to cover than a passive manager. Further, through their research processes, active managers can incorporate

By Suzanne Barlyn

NEW YORK, Oct 12 (Reuters)Asian stocks were set to rise on Tuesday as a renewed tech rally and fresh optimism that Washington would deliver a coronavirus relief package helped lift global equity markets.

Shares in Apple Inc AAPL.O surged 6.4% on Wall Street on Monday ahead of an expected debut of its latest iPhone on Tuesday, helping boost technology stocks, while Amazon AMZN.O rallied 4.8% ahead of its Prime Day shopping event this week.

CommSec Senior Economist Ryan Felsman said a COVID-19 resurgence in Europe and the United States is partly fueling the tech rally.

“Once again, there is a desire to hold the stay-at-home types of technology stocks…which will still generate profits and will be greatly oriented to a more challenging economic environment,” Felsman said.

On Wall Street, the Nasdaq Composite .IXIC on Monday staged its biggest one-day rally in a month, jumping 2.56%. The Dow Jones Industrial Average .DJI rose 0.88% and the S&P 500 .SPX gained 1.64%.

The U.S. dollar was pinned near a three-week low and gold, another safe-haven asset, stayed below a three-week high, slapped by investor demand for risk. The U.S. bond market is closed on Monday for Columbus Day.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.11% higher.

Australian S&P/ASX 200 futures YAPcm1 rose 1.05% in early trading. Hong Kong’s Hang Seng index futures .HSIHSIc1 rose 0.11%.

E-mini futures for the S&P 500 EScv1 rose 0.01%.

The dollar index =USD fell 0.078%, with the euro EUR= unchanged at $1.1813.

The pan-European STOXX 600 index .STOXX rose 0.72% and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.01%.

Bets that more U.S. stimulus was in the offing came despite signs that talks in Washington had stalled again, leading the Trump administration to call

NEW YORK (Reuters) – Asian stocks were set to rise on Tuesday as a renewed tech rally and fresh optimism that Washington would deliver a coronavirus relief package helped lift global equity markets.

Shares in Apple Inc

surged 6.4% on Wall Street on Monday ahead of an expected debut of its latest iPhone on Tuesday, helping boost technology stocks, while Amazon

rallied 4.8% ahead of its Prime Day shopping event this week.

CommSec Senior Economist Ryan Felsman said a COVID-19 resurgence in Europe and the United States is partly fueling the tech rally.

“Once again, there is a desire to hold the stay-at-home types of technology stocks…which will still generate profits and will be greatly oriented to a more challenging economic environment,” Felsman said.

On Wall Street, the Nasdaq Composite <.IXIC> on Monday staged its biggest one-day rally in a month, jumping 2.56%. The Dow Jones Industrial Average <.DJI> rose 0.88% and the S&P 500 <.SPX> gained 1.64%.

The U.S. dollar was pinned near a three-week low and gold, another safe-haven asset, stayed below a three-week high, slapped by investor demand for risk. The U.S. bond market is closed on Monday for Columbus Day.

MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.11% higher.

Australian S&P/ASX 200 futures

rose 1.05% in early trading. Hong Kong’s Hang Seng index futures <.HSI>

rose 0.11%.

E-mini futures for the S&P 500

rose 0.01%.

The dollar index <=USD> fell 0.078%, with the euro

unchanged at $1.1813.
=>

The pan-European STOXX 600 index <.STOXX> rose 0.72% and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> gained 0.01%.

Bets that more U.S. stimulus was in the offing came despite signs that talks in Washington had stalled again, leading the Trump administration to call on Congress to pass a less ambitious coronavirus relief bill.

U.S.