BlackRock was out with its quarterly results on Monday and these are always worth taking a few minutes to parse because, you know, BlackRock is the largest asset manager on the planet.
There were a number of notables from the quarter, including the following chart which shows that inflows into iShares products were just $18 billion, the lowest since Q2 2016:
Perhaps even more notable was the fact that investors look to have yanked more than $22 billion from the firm’s equity products during Q2:
In the press materials, Larry Fink mentions an “industry-wide slowdown in flows associated with investor uncertainty in the current market environment.”
He followed up on that in an interview with Bloomberg TV’s Erik Schatzker. Here’s Fink on how investors are struggling to comprehend what the future holds amid concerns about the Trump administration’s push to rewrite the rules of global trade and commerce:
The market’s having a hard time digesting the whole change in globalization and trade. The foundations of international trade are being raised and being questioned.
Fink also notes that while buybacks and M&A argue for a bullish outlook, investors are rethinking things in light of the trade concerns and also due to the fact that cash is actually a viable alternative now (remember: TINA died in Q1). In a sign of the times, 2Y yields hit new post-crisis highs on Monday:
“You are being paid now to take some risk in the short end of the curve,” Fink said Monday, in the same interview, before echoing everyone (including Jeff Gundlach) on the inversion point:
We will see an inversion of the yield curve, sometime this year. But I don’t believe it means we are going into a recession.
In any event, here’s a short clip from Fink’s interview with Schatzker: