So Rick Rieder, the guy who manages a casual $2.4 trillion at BlackRock (yes, trillion with a T), just went on CNBC and basically said we’re living in the golden age of investing. And honestly? His reasoning is pretty solid.
Now, before you roll your eyes and think “another Wall Street cheerleader,” hear me out. This isn’t some random crypto bro on Twitter. This is the chief investment officer of global fixed income at the world’s largest asset manager. When he talks, people listen – mainly because he’s responsible for more money than most countries’ entire GDP.
The Cash Mountain That Could Move Markets
Here’s the first thing that caught my attention: there’s about $7 trillion just sitting in money market funds. That’s trillion. With a T. Again. To put that in perspective, that’s roughly the entire GDP of Japan just chilling on the sidelines, earning basically nothing.
Rieder’s bet? As interest rates come down (more on that in a sec), all that cash is going to get bored and start looking for better returns. And where does bored cash go? You guessed it – stocks.
Add to that the fact that companies are buying back their own stock at record levels, and you’ve got what economists call “favorable supply and demand dynamics.” Or as normal humans call it: “not enough stock to go around.”
Companies Are Actually Making Money (Shocking, I Know)
Despite all the doom and gloom about tariffs and economic uncertainty, 81% of S&P 500 companies that have reported earnings this quarter beat expectations. That’s above the 10-year average, which is finance-speak for “pretty darn good.”
Even the Magnificent Seven tech stocks (minus Tesla, which apparently didn’t get the memo) are growing earnings at a 54% clip year-over-year. At that rate, their sky-high valuations start to make sense. It’s like paying premium prices for a house in a neighborhood that’s actually getting better.
The Fed Might Actually Help For Once
Remember when the Federal Reserve was the market’s biggest enemy, raising rates like they were trying to kill inflation with a sledgehammer? Well, plot twist: they might start cutting rates again in September.
Why? The job market is showing some slack (July’s jobs report was weaker than expected), and inflation is behaving itself. Rieder thinks the Fed could cut rates by a full percentage point, which would be like giving the economy a shot of espresso.
The AI Productivity Play
Here’s where it gets interesting. All this spending on AI, data centers, and tech infrastructure isn’t just Silicon Valley showing off. Rieder sees it as the foundation for a productivity boom that could drive economic growth for years.
Sure, not everyone agrees with his ultra-bullish take. Recent surveys show 43% of investors are bearish on stocks over the next six months. But when someone managing $2.4 trillion says we’re in the “best investing environment ever,” it might be worth paying attention.
Just don’t bet the farm on it. Even the best environments can have bad weather.