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Mohamed El-Erian, chief economic adviser at Allianz, said earlier this month that he’s not as optimistic about the U.S. economy as the stock market and the president seem to be. In fact, he warned that “we should buckle our seat belts” because the road ahead is still bumpy.
He sounded quite a bit more cheerful on Tuesday.
“ ‘It’s not just stocks. It’s other risk assets. It’s fixed income. It’s currencies, and it’s commodities. So it’s really good to see an across the board risk-on tone, which we haven’t had really for quite a while.’ ”
That’s the view El-Erian shared in a CNBC interview in the early stages of Tuesday’s strong rally.
At last check, the Dow Jones Industrial Average DJIA, +2.69% was up almost 600 points, rallying on what El-Erian described as “good news across the board” on the coronavirus front.
He pointed to developments on a potential vaccine as well as a reopening of the U.S. economy that has, so far, shown no dramatic spikes of new cases. He also said several indicators suggest consumers are willing to participate in the process of getting back to normal.
“The big hope is we sustain it,” he said, adding a word of caution. “This is not going to be a smooth process. There’s going to be ups and downs but keep an eye both on the health side and on the engagement side and that will give you a very good view as to where we’re going.”
Watch the interview:
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