The European Central Bank could add equities to the list of assets it would buy to shake Europe out of its doldrums and stir up some inflation, according to market pros.
The European Central Bank could ultimately add stocks to the assets it purchases in an effort to shake its economy out of the doldrums by prompting companies to do more investment and spending.
Rick Rieder, BlackRock chief investment officer of global fixed income, said the European negative interest rate policy has actually had the effect of making equity financing more expensive for European corporates. Rieder said multiples on European equities are low, and the central bank could make targeted purchases in the market through ETFs or select sectors. "European equities re not expensive at all," he said, in response to a question on whether the ECB would create a stock market bubble with stock purchases.
He said there's been underinvestment in Europe, and righting the capital structure, so it's not so tipped toward debt would be healthy.
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