Some big names were speaking in Saudi Arabia early on Tuesday. With all the violence going on around the world, it’s no longer a bad thing for business leaders to be seen in Saudi Arabia seven years after Jamal Khashoggi was killed.
It was the annual Future Investment Initiative Institute. The Public Investment Fund, Saudi Arabia’s national wealth fund, runs it and is in charge of $925 billion in assets.
Some of that $925 billion is held by BlackRock, which opened a financial arm in Riyadh earlier this year. It was no surprise that Larry Fink, CEO of BlackRock, was one of the speakers.
Fink talked about how much money is needed to automate and cut down on carbon emissions. He said that Walmart was an example of a store that used AI to run its room to sell things.
“There are $9 trillion in money markets right now. He also said, “There is an urgent need to build this infrastructure, and it will also be a great investment. I really believe this will be driving the stock market for the next few years.”
That being said, he did say that price-to-earnings rates are “extreme.” But perhaps not so bad. He said, “Earnings are catching up to the P/Es.”
Fink also said that it might not be true anymore that higher interest rates will slow down the U.S. economy. Fink said, “I think the playbook that higher interest rates can slow down an economy has to be relooked at because our population is getting older”. This is because older people save more money.
He also said that it takes a lot longer for higher interest rates to be passed on because most Americans who own homes have 30-year fixed-rate mortgages.
Ken Griffin, CEO of Citadel, said that markets will do better after the election because there will be less uncertainty. “Less uncertainty is almost always good for asset prices, and right now we’re at the height of uncertainty in a race that Trump is favored to win but it’s almost a coin toss. So I would say that after the election, we’ll generally see a risk-on environment as people get used to a new regime, whether it’s a Trump regime or a Harris regime. This uncertainty will be behind us.”
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