Stocks to rally in 2021 but not as much as last year

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BlackRock’s Larry Fink told CNBC on Thursday that he believes the stock market has further room to run higher. However, the chairman and CEO of the world’s largest asset manager cautioned that the rally may not be as robust as it was in the second half of 2020.

“I think we’re going to continue to see the market to be strong into 2021, probably not as strong as we saw in the fourth quarter or the third quarter last year,” Fink said on “Squawk Box.”

The S&P 500 rose more than 20% from July 1 to Dec. 31 as part of a massive recovery in equities from the coronavirus pandemic-induced sell-off that occurred in February and March.

One factor that should provide a tailwind for the market is the “record” amount of cash investors have on the sidelines, Fink said.

“We are persistently seeing investors worldwide under-invested, not over-invested, in long-term assets, and the best source of long-term assets are equities and many asset categories in the private area,” he said.

Shares of BlackRock were higher by more than 1% Thursday after the New York-based firm reported better-than-expected profits and revenue in the fourth quarter.

BlackRock’s assets under management surged to a record $8.68 trillion at the conclusion of the quarter. That’s up from $7.43 trillion in the same period last year.