2020 was a bombastic year for the stock market. But can the rally continue this year?
Ray Dalio of Bridgewater Associates doesn't think 2021 will be as buoyant for stocks as last year was, he said on a digital panel at the Future Investment Initiative conference in Saudi Arabia.
BlackRock (BLK) CEO and chairman Larry Fink agrees 2021 won't be as opulent as last year, even as the long-term conditions for investors are still favorable.
"Some of the expected recovery [in the economy] is already priced in," said Dr. Thomas P. Gottstein, CEO of Credit Suisse (CS), at the event. But the low interest rate environment means that stocks will continue to be more attractive for investors than other investments, such as bonds.
Meanwhile, the pickup in deficits as governments spent big to fund stimulus programs will mean that countries such as the United States will have to sell more bonds.
"I don't believe there is enough demand for those bonds," Dalio said, so the Federal Reserve might have to step in to buy more bonds to bridge the gap.
Elsewhere, the trend to go public through SPACs -- special purpose acquisition companies, publicly traded investment vehicles that buy other businesses -- is spurring a lot of M&A activity. Coupled with a lot of capital waiting to be deployed, these conditions are "very constructive" for the M&A market, said Goldman Sachs (GS) CEO David Solomon at the event.