The world’s leading private equity firm suggests the US the ultimate safe haven play.
According to Blackstone’s Joseph Zidle, it’s largely insulated from the Russia-Ukraine war fallout.
“The US is an island of growth,” the firm’s chief investment strategist told CNBC’s “Fast Money” on Thursday. “The US is one of the only major economies in the world that has this cushion of $ 6 trillion in stimulus.”
Zidle notes the vast benefits are in household and corporate balance sheets.
“It means the US has this tremendous cushion for growth as the rest of the world faces these headwinds,” said Zidle.
Wall Street may be getting the message. Stocks staged a massive turnaround in the final hour of trading. The Dow, S&P 500 and tech-heavy Nasdaq finished in positive territory.
He acknowledges rising input prices tied to commodities to coordinated central bank hikes remain risks, too. But the strong labor market, said Zidle, is giving the US a major advantage.
It’s one of the top reasons why Zidle is a long-term bull on housing, a group that has gotten swept up in the selling. The SPDR S&P Homebuilders ETF, which tracks the industry, is off 21% so far this year.
“Personal income has gone up more than the increase in mortgage rates,” he noted. “It’s important to consider … [the] strong labor markets and rising wages. And, historically housing ends up being more correlated to labor than it is to mortgage rates. “
Zidle also expects job security and rising home values to favor consumer stocks.
“Now, the consumer has got a lot of issues that they’re facing in terms of these higher input prices and there’s a lot of different things competing for wallet share. But I think a strong labor market can end up offsetting a lot of that , “Zidle said.