“The Stock Market Is Too High!”
Billionaire David Tepper thinks markets are the most overvalued since the dot-com bubble. Billionaire Stanley Druckenmiller believes markets present the worst risk-reward skew he’s ever seen. Billionaire and President Donald Trump has told these “so-called rich guys” to keep schtum.
He hopes to be re-elected in a bull market and is negotiating another multi-trillion-dollar stimulus bill in Washington. It seems Federal Reserve chief, Jerome Powell, is on his side, too, speaking for the first time in weeks after administering life support to the economy with unlimited money printing and interest rate cuts to zero.
His job is to stabilize markets, and he’s committed to doing whatever that takes in spite of exhausting most of his monetary ammunition already. As a last resort and final recourse, we could see negative interest rates for the first time in US history.
The markets are so finely balanced that after a thirty percent boom from last month’s lows, we’re still feeling uncertain. The market fell “only” four percent yesterday, however, and bears took a victory lap. Influential investors say the top is in.
According to Google Trends, buying stocks has become a popular lockdown activity, and so an influx of first-time investors could be tiding us over until quarantines are lifted, and businesses can actually reopen. If coronavirus were to strike again, though, it’s unlikely these fragile markets would put up much of a fight before keeling over.
It may be worth adjusting portfolios, folks; half long, half short!
