Allianz Chief Economic Adviser Mohamed A. El-Erian said Wednesday a “black swan” event that could derail the markets is more likely to come from a geopolitical shock.
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“If North Korea went from testing missiles to actually attacking either Japan, South Korea or even trying to get to the U.S. territories with a missile - that would be a black swan,” El-Erian said during an exclusive interview with FOX Business’ Liz Claman.
Additionally, El-Erian discussed President Trump’s impact on the stock market.
“You need only look at how the internals of the markets have changed. This is no longer a Trump rally based on policy expectations. This is a liquidity rally with a bit of reflation hope globally,” he said, adding, “My view is fewer dollars but take more risks with those dollars. So I would continue to look for lagging sectors, but I would put fewer dollars at risk at this stage of the rally.”