BlackRock, the world’s largest money manager, beat Wall Street’s profit projections in the past three months despite “investor uncertainty” fueled by rising global trade tensions.
Total assets climbed 11 percent to $6.3 trillion, though the net amount of money added to the New York-based company’s investment platforms was markedly lower than a year earlier, when U.S. stock markets were smashing record after record. Concern that trade disputes initiated by President Trump will derail economic growth, along with rising interests, have pulled indexes down in 2018.
“Strong earnings and the U.S. economic growth unfortunately are being offset by heightened uncertainty due to rising protectionism and potential barriers to the open markets and free trade that have for years supported global economic growth and the expansion of international markets,” BlackRock Chairman and CEO Larry Fink told investors on an earnings call.
The firm’s profit of $6.62 a share in the second quarter topped the average estimate of $6.60 from Wall Street analysts, and net income climbed 26 percent to $1.07 billion.
The company, which is benefiting from a massive cut in the top corporate tax rate last year, posted an 11 percent increase in revenue amid higher fees and growing demand for technology services.
Firms across Wall Street have echoed Fink’s reports of rising volatility in the last three months through June, however. A key gauge of it has climbed 16 percent so far this year amid President Trump’s steel and aluminum tariffs, duties on as much as $450 billion of goods from China, one of the largest U.S. trading partners; and threatened levies on automotive imports.
Fink warned the move toward protectionist trade policies and new barriers to open markets are troubling investors and causing them to reevaluate risk. He also said global political uncertainty is climbing among investors as new leaders take over in Italy and Mexico.
The Nasdaq Composite Index, which includes large tech stocks such as Apple, Google, Microsoft, and Amazon, is up over 13 percent this year — compared to only a 1.2 percent gain by the blue-chip Dow Jones industrial average.
BlackRock dipped 0.6 percent to $503.96 at the close of New York trading on Monday, widening its decline so far this year to 1.9 percent.
