The stock market is testing new highs almost daily, but Wall Street titans are feeling uncertain.
“I’m not relaxed,” BlackRock CEO Larry Fink said at a Yahoo Finance conference in New York on Wednesday.
Fink cited policy uncertainty under President Trump as well as broader issues, such as lack of infrastructure spending and poorly funded retirement savings accounts as reasons why he has been feeling “bipolar” about the direction of the market and broader economy.
“Markets are probably ahead of themselves,” Fink said, pointing to what he called “dark shadows” that could affect the marketplace.
On infrastructure, Fink said that the US is late in preparing its cities for coming technology.
Fink also sees American retirees facing problems because despite the market being at new highs, individual investors often time market swings incorrectly: they sell when the market drops and buy near the highs.
“They panic at the wrong time,” Fink said.
“We have this impending crisis of Americans who are not prepared financially to live in retirement with dignity because they just have an inadequate amount of savings,” Fink said.
Fink’s uneasy sentiments were echoed in a later panel.
“Many investors did not expect that there would be this level of confusion,” Abby Joseph Cohen of Goldman Sachs said, referring to an unknown timeline for Trump’s policies.
Not all of them are going to operate on a specified time table, Cohen said.
Meanwhile, Liz Ann Sounders, Chief Investment Strategist, Charles Schwab, said markets are certainly “choppy” but not yet at a level where the TVs at sports bars are going to be tuned to financial news instead of games.
Sounders was also puzzled by high levels of policy uncertainty while the VIX, a measure of market uncertainty, has been low.
The market is reaching highs even though multi-standard deviation events such as Brexit, Trump’s win, and even last week’s Super Bowl outcome are happening with greater frequency, Michael Batnick of Ritholtz Wealth Management said.
“Political uncertainty does not equal stock market uncertainty,” Batnick said.
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