Top BlackRock executives still believe the U.S. might avoid a recession, and they see special investment opportunities in the current market.
Well have a narrow recession or more likely a brush with one, said Robert Doll, vice chairman and global CIO for equities at BlackRock. With anything related to housing, credit and financials, the news is bad and probably going to get worse. Outside to that, with the exception of some pieces tied to the consumer (spending) everything is OK to better than OK.
Mr. Doll said there is an absence of excess inventory for most U.S. companies. Usually, excess inventory is a sign of a future recession.
Scott Amero, vice chairman and global CIO for fixed income, said there are still a lot of opportunities for fixed-income managers to buy discounted but high-quality corporate bonds and commercial mortgage-backed securities. Were in the middle of a de-leveraging cycle, he said. In this process, people are selling what they can. Good assets are being sold with the bad assets.
Prices of commercial real estate properties will go down, but the loans tied to commercial real estate arent at all like subprime, Mr. Amero said, adding that commercial loans have better underwriting and fundamentals for the underlying properties.
Messrs. Doll and Amero made their comments during at a round table discussion today in New York about how the credit markets are affecting investing.