💵 Is BlackRock's $10T Dream Still Distant?

Virgin Galactic delays flights; J&J's new subsidiary.

Hey Global Investor! Here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Thursday’s Close) 4,438.26 +74.46 (1.71%)

NASDAQ (Thursday’s Close) 14,823.43 +251.79 (1.73%)

FTSE 100 (4 PM IST) 7,229.19 +21.48 (0.30%)

NIFTY 50 (Thursday’s Close) 18,338.55 +176.80 (0.97%)

USDINR (Thursday’s Close) 75.28 (1 Year +0.15%)

🔥 Top Movers

NRXP +26.17%
EVLO +12.92%
RLAY +11.78%

PLXP -16.73%
BTAI -12.67%
FUTU -12.41%

💵 BlackRock: The Wait Continues?

World’s largest asset manager BlackRock (BLK), beat consensus estimates in Q3 on nearly all fronts. Its foray into sustainable investing seems to be paying off. However, Blackrock’s Assets Under Management (AUM) is so-near-yet-so-far from the $10T mark! (Tweet This)

Cleaner Goals

BlackRock reported record revenues in Q3 after a substantial jump in fee revenue.

Key Stats from Q3:

  • Revenue: $5.05B Vs $4.9B expected
  • EPS: $10.95 Vs $9.35 expected

Performance fee of $345M figure beat consensus expectations of $220M by a distance. Organic fee growth for the quarter stood at 9%, the sixth straight quarter of the figure exceeding the company’s own 5% target.

The company’s AUM rose to $9.46T, a 21% increase Y-o-Y, and more or less flat compared to Q2 AUM of $9.49T. Analysts expected the firm to cross the $10T mark. Still, market volatility towards the latter half of the quarter precluded the world’s largest money manager from getting to the magic number.

Climate change has put the Environment, Social, Governance (ESG) theme front and center for investors, and it showed in BlackRock’s results. The company received long-term net flows of $98B during the quarter. Of these, one-third, or $32B, went into sustainable funds, a quarterly record!

According to CEO Laurence Fink, this awareness seems to be more in Europe, although the US is slowly catching up. For instance, the firm launched the BlackRock US Carbon Transition Readiness ETF (LCTU) in April, which attracted inflows worth $1.25B on its first day – a record-breaking number for any ETF ever!

Chinese Checkers

In August last year, the Chinese Banking and Insurance Regulatory Commission (CBIRC) approved the joint venture of BlackRock and Neuberger Berman to manage and sell mutual funds in China. It became the country’s first wholly foreign-owned mutual fund firm that could directly sell products to Chinese individuals without forming partnerships with local firms.

With China expected to have $13T in AUM by 2023, asset managers such as BlackRock are keen to explore the market as they position themselves for the long term. Last month, the company set up a maiden China fund worth $1B.

However, billionaire investor and philanthropist George Soros termed BlackRock’s move a “tragic mistake.” He railed against the firm for getting into a money-losing proposition for clients and went on to say the US national security is under threat because the largest money manager is beholden to China.

In response, BlackRock issued a non-answer saying it plans to help China address its retirement crisis by providing retirement system expertise, products, and services. For now, China is still an insignificant part of BlackRock’s $9.5T AUM.

As long as the company does not fall in the line of fire of the Chinese government, investors are happy to look the other way and hope that the $10T landmark arrives soon and stays on, just like solid black rock!

Market Reaction
BLK ended at $892.51, up 2.84%. Shares are up 26% this year.

Company Snapshot 📈

BLK $892.51 +24.63 (2.84%)

Analyst Ratings (14 Analysts) BUY 79%  HOLD 21%  SELL 0%

Newsworthy 📰

New Subsidiary: J&J puts talc liabilities into bankruptcy (JNJ +1.60%)

Postponed: Virgin Galactic delays beginning of commercial spaceflights to Q4 2022 (SPCE -14.17%)

Plan: Walgreens shares surge as CEO outlines plans to make healthcare its growth engine (WBA +7.43%)

Later Today 🕒

  • Goldman Sachs Inc. Earnings (GS)
  • Prologis Inc. Earnings (PLD)
  • PNC Financial Services Group Inc. Earnings (PNC)
  • Truist Financial Corp. Earnings (TFC)
  • JB Hunt Transport Services Inc. Earnings (JBHT)
  • First Capital Inc. Earnings (FCAP)
  • Acme United Corporation Earnings (ACU)
  • 6:00 PM IST: Retail Sales
  • 7:30 PM IST: Consumer Sentiment Index

Today’s Market Terminology: Ex-Dividend

Ex-dividend refers to a stock that trades without the value of the next dividend payment. After a stock goes ex-dividend, the share price typically drops by the amount of the dividend paid

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