Strong earnings and cash flows from major companies means that the stock market should able to sustain its record highs, according to veteran investor Rick Rieder. The head of the global allocation team at BlackRock said Thursday on CNBC's " Squawk Box " that he isn't worried about the level of the stock market after a dramatic run over the past year and a half. "I actually don't think the equity market is high at all. I mean look at the some of the companies, the free cash flow yields are really high," he said. Rieder pointed to strong earnings reports from retailers and the profit margins at tech companies as proof that the return on equity for many stocks is attractive even as market indexes hit record highs. He did say that some stocks were too high, but not the market as a whole "That's not to say we can't reprice down a bit if we got something hawkish out of the Fed, but markets will come right back," he added. The real area of concern for overvalued assets is in the fixed income sector, specifically lower quality debt, Rieder said. Federal Reserve Chair Jerome Powell will speak virtually at the central bank's annual Jackson Hole summit Friday. He could indicate when the central bank will begin to cut its asset purchases. Rieder, who is also the chief investment officer for global fixed income at BlackRock, said he believes the Fed is late to tightening its monetary policy and should try to accelerate its rate hikes, which many investors believe will occur in 2023. Watch the full interview above.
Anjali Sundaram | CNBC
Strong earnings and cash flows from major companies means that the stock market should able to sustain its record highs, according to veteran investor Rick Rieder.