During an interview on the FOX Business Network’s Mornings with Maria, Blackrock Chairman and CEO Larry Fink said President Trump's policies will set the tone for future performance of the markets.
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“There’s a lot of nuance, but... in the short run let’s see what earnings season brings to us. If earnings continue to be like what GE and Apple announced… maybe the stock market is fairly priced,” he said. “But to have the next leg [up]… We have to have some of the performance out of Washington.”
While his outlook for U.S. stocks remains fairly bullish, he's keeping a close eye on Asia.
“The U.S. market is probably priced for perfection versus Europe and Asia. At this time Asian equities represent more value than the U.S.,” he said.
Fink is unsure whether the U.S. markets will face a setback, and issued a warning on valuations.
“Our valuations are also extreme, with the expectations… that we are going to have tax reform and deregulation,” he said. “I believe this is going to take a somewhat longer time, but we all should hope that we are going to get some success out of the Administration to validate the marketplace.”
He added, “If somebody asked me could we see a 5 or 10 percent retrenchment in our equity markets over time, I would say absolutely. I would also then say buy, buy, buy.”