An urgent warning from a well-known billionaire and manager. Why is he convinced that the markets will soon fall to…
Stanley Druckenmiller has long been a critic of the Fed's actions. But now he argues that the central bank's behavior could spell total market apocalypse.
Billionaire investor Stanley Druckenmiller believes the Federal Reserve 's efforts to quickly eliminate the excess spending it has created through decades of loose monetary policy will not end well for the U.S. economy.
"We anticipate a really hard landing by the end of 2023," Druckenmiller said. "I'll be stunned if we don't have a recession in '23. I don't know the timing, but certainly by the end of '23. And I won't even besurprised if it's a recession that we haven't seen before."
That's a scary thing to say coming from a guy who had an average annual return of 30% from 1986-2010. He's even considered the best of the "unknown investors on Wall Street."
https://www.youtube.com/watch?v=BtMNls7O3FY
Druckenmiller believes that the extraordinary quantitative easing and zero interest rates of the past decade created a bubble in asset markets. "All of these factors that fueled the bull market have not only stopped, but each of them has actually started to reverse completely," Druckenmiller said. "We have a huge problem of problems."
The Fed is now in the midst of the most aggressive pace of tightening since the 1980s. The central bank has raised rates by three-quarters of a percentage point several times in a row and promised further increases to beat inflation, sparking a major sell-off in risky assets. The S&P 500 index is drowning in investor blood.
https://www.youtube.com/watch?v=PB-D4KDifJM
The investor said the Fed made a policy mistake when it came up with the "ridiculous theory of transience" thinking inflation was driven by supply chain and demand factors that are largely linked to the pandemic.
"When you make a mistake, you have to admit you were wrong and move on to sitting around for nine or 10 months and buying $120 billion of bonds," Druckenmiller said. "I think the consequences of that are going to haunt us for a long time."
Druckenmiller once ran George Soros' Quantum fund and became famous for making a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.
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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.
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"S-team and I are deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted," Jassy wrote. "We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support."1
Slumps are a natural part of the market. But we are all probably eagerly awaiting the end of this year's. And in the flood of pessimistic views comes an analyst from Morgan Stanley who believes the end of the bearmarket is coming soon! When?
With US stocks down more than 20% this year, investors are looking for good news. And that's exactly what an analyst from Morgan Stanley has come up with. What does he say?
Second, performance will be slowed by the maturation of Alphabet's core search advertising business. Certainly, growth in other segments, such as cloud computing, could outweigh this.
However, a third factor (increasing competition) may spoil the chances of that happening. High competition for market share between Alphabet and rivals like Amazon and Microsoft may limit future growth and swing to profitability of its cloud business.
Amazon Web Services (AWS), a profitable cloud platform online retailer that has established itself as the early leader in the cloud infrastructure market, is still ahead. Synergy Research Group estimates that Amazon's market share of the global cloud infrastructure market will reach 34 percent in the third quarter of 2022, still exceeding the combined market share of its two largest competitors, Microsoft Azure and Google Cloud.
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In an interview with Bloomberg Television, Mike Wilson, the firm's equity strategist and chief investment officer, predicted that the bear market in U.S. stocks could end by early 2023. Investors are taking this seriously because Wilson, who is usually extremely skeptical of the market, recently won a prestigious award for best institutional investor.
Big tech" stocks have lagged the broad S&P 500 index this year, and online advertising giant Alphabet is no exception. Its stock is down nearly 34% year-to-date compared to the S&P 500, which has erased about 16%. Here are 3 reasons why this underperformance in GOOG stock could persist into 2023.
On closer inspection, however, the question is whether improving economic conditions will mean a big rebound for the tech giant's stock. The road back to its all-time high closing price ($150.71 per share ) could be much longer than currently expected.
There are three factors, all of which will remain in play even after today's problems, such as inflation and slowing economic growth, are resolved. With that in mind, the stock (just under $100 per share today) may not be the opportunity to miss that some think it is.
First, interest rates, which are undoubtedly related to the company's current headwinds. Inflation is at its highest level in decades. But the Federal Reserve, which sets the country's monetary policy, took another step at its last meeting in its attempt to curb these economic stresses by raising interest rates by three-quarters of a percentage point for the fourth time this year. "Without price stability, the economy doesn't work for anybody," Fed Chairman Jerome Powell said at a news conference on Wednesday, Nov. 2.
High inflation has led to high interest rates, which has affected economic growth and Alphabet's underlying performance. Still, even after inflation cools, interest rates won't necessarily return to near zero. That could limit the extent to which GOOG's earnings multiple (currently at 18.94 ) will expand again after the downturn. Investors are therefore now wondering whether, after a cycle of interest rate hikes around the world, markets are approaching a so-called pivot, i.e. a slowdown in the pace of such rapid tightening and a reversal in central bankers' rhetoric. Today, it's the Fed's turn again. US consumer price inflation has boosted the chances of a dovish move by the Fed. A rate hike at today's meeting is more than certain. The market is currently discounting a 50 basis point rate hike at tomorrow's FOMC meeting. Also of note will be the release of the dot-plot (published quarterly) in which members communicate their current expectations for interest rates.
The market is like a roller coaster this year. Huge drops alternate with sharp upward movements
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