- BlackRock's Rick Rieder said the market has not bottomed, but he is selectively picking up some stocks that are now at a "once in a lifetime" valuation.
- Rieder said he is also buying mortgages but remains cautious on corporate bonds.
- The market needs to see a the rising number of coronavirus cases begin to slow down in order to recover.
BlackRock's Rick Rieder said it's time to carefully pick up some stocks based on crushed valuations, but the market is not likely bottoming.
"It's hard to see where you're going to see them waving the checkered flag that it's all clear to get back in the market until there's some clarity around when that [virus infection] curve flattens ... and people get back to work," Rieder, BlackRock's global CIO of fixed income, told CNBC. Analysts are looking for signs the number of new coronavirus cases are peaking, but that is not expected for more than a month or several months at least.
"It's hard to say are we two weeks away or months away," he said.
Rieder said he's cautious on corporate bonds, but he sees value in some beaten down equities.
"Today, I like mortgages and very selective equities, and I think we're going to let the credit market work its way through for a period of time," he said. "The options market and volatility markets are allowing you to get some equity beta in some attractive ways."
"We are picking away at some stocks that have some real value in health care, technology and construction. I think you've got to go in one toe at a time, but some of these multiples are so attractive," he said. Even if companies take an earnings hit, "this is a once-in-a-lifetime opportunity to get these types of assets at these multiples."
Rieder said the stock market sell-off is clearly not ending. "If you said could we go down another 5% ... I would say I think so ... You could do potentially more downside."
Rieder said investors should just continue to hold the beaten up assets they own now, as the market shakes out. "The one place we've been looking at assets and adding a bit is where the Fed is going to be a buyer," he said, noting the firm had already had a favorable view of mortgages.
The Fed on Sunday announced a new quantitative easing program under which it plans to buy $700 billion in Treasurys and mortgage securities.