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Treasury Volatility Has Peaked, But Equity Market Remains Uncertain: BlackRock's Rick Rieder

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Treasury Volatility Has Peaked, But Equity Market Remains Uncertain: BlackRock's Rick Rieder

Bond market volatility has peaked, and the stock market may have hit bottom, the BlackRock, Inc (NYSE: BLK) Managing Director Rick Rieder told CNBC on Wednesday.

What Happened

"I think the 10-year could back up to 1%, but I don't think we're moving significantly higher than that any time soon. My sense is we're going to be at 60 basis points on the low, for [a while] unless we see an exogenous shock," CNBC quoted Rieder as saying.
The 10-year Treasury yield was at 0.805% early Thursday at press time. It fell from Wednesday evening's 0.86%, as the Senate passed the novel coronavirus (COVID-19) stimulus package.

Rieder said that we wouldn't see a repeat of last week in terms of treasury volatility, but the equity volatility is "still extraordinary."

The BlackRock global chief investment officer of fixed income added that while he can't be certain that the stock market has bottomed out, he certainly sees it as "cheap."

S&P 500 won't drop below 2,300 again, according to Rieder. The index closed 1.15% higher at 2,476.6 on Wednesday.

Why It Matters

The Federal Reserve cutting interest rates and providing liquidity in the market has also been immensely helpful, as per Rieder. "When they were doing $60 billion a month, that was immense," he said. "I don't have an adjective for $70 billion a day."

Rieder told CNBC that the situation couldn't be improved much before another three weeks or so, but improvements in testing would help.

The testing would help determine who's immune to the coronavirus and get workers back to the economic activities without risking further spread.

He added that the labor department's unemployment report later Thursday will also provide key data in determining how badly the labor market has been hurt by the pandemic.

 

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