Stock market at "merger risk, no merger," warns Larry Fink of BlackRock

"We risk a merger, not a merger here."

BlackRock Inc.

BLK, + 1.75%

CEO Larry Fink said that as shares knock on the record door, a bullish climb seems more likely than a market meltdown. That's because many investors still have a lot of money to spend, CNBC has been told by the head of the world's largest asset manager in an interview with CNBC.

"Despite the equity market position, we have not seen the money put to profit," said Fink. "We have record amounts of money in cash."

A merger is often defined as a sudden and unexpected rise in the price of an asset class, mainly due to the rush of investors who are more afraid to miss a big rise than to improve the fundamentals of the asset class. market. Fonts are often followed by significant setbacks in the market.

After a massive sale in the fourth quarter that pushed the S & P 500

SPX, + 0.32%

and the Dow Jones Industrial Average

DJIA, + 0.49%

corrected, but halted a little before a bear market – defined as a 20% drop from a recent high – stocks have skyrocketed. Since the beginning of the year, the S & P 500 index has risen 15.9% and is less than 1% below its peak of 2,930.75 (September 20).

Last week's Lipper data showed US investment funds had $ 4.3 billion in cash inflows in the week ending April 10, but had a cash outflow $ 19.7 billion from the end of last year to April 3.

Lily: Individual investors finally get bullish as the stock market approaches record highs all the time

The stock market rally recorded so far this year is in part due to a drastic shift by the Federal Reserve, which abruptly halted its policy tightening efforts in January to adopt a wait-and-see approach after recording four rate hikes in 2018. Fed policy Policymakers said they did not expect any rate hikes this year. At the same time, the European Central Bank, which ended its bond purchase program late last year, launched a new series of bank stimulus measures in March in the face of the economic gloom.

According to Mr. Fink, the lack of transparency of central bankers creates a shortage of "good assets", which could trigger a global merger of stock prices.

BlackRock announced Tuesday a decline in its profits in the first quarter due to a price war that continues to affect the asset management industry. Total assets under management rebounded to more than $ 6 trillion after a pullback at the end of 2018.