A 'black swan' is more likely to come from a geopolitical shock: Mohamed A. El-Erian

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.

“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.”