Billionaire trader Paul Tudor Jones rings the bubble alarm, warns the Fed could tank the economy, and predicts pandemic winners will struggle
Paul Tudor Jonesdiagnosed a huge market bubble and warned that popping it could hammer the economy.
- The billionaire trader predicted the best-performing assets during the pandemic would soon struggle.
The billionaire trader and founder of Tudor Investment Corporation warned asset prices could plunge, and the economy could suffer if the
Jones also called out the heady valuation of the US stock market today, and predicted that commodities would outperform financial assets over the next few years.
Here are Jones' six best quotes from the interview, lightly edited and condensed for clarity:
1. "US equities are really extraordinarily valued relative to GDP." — Jones pointed to the current Buffett indicator reading of more than 200%, which suggests the stock market is hugely overpriced relative to the size of the economy.
2. "Can the Fed unwind what appears to be a financial bubble without there being huge, negative economic consequences? It'll be interesting to see. I'm nervous because we're at such lofty heights."
3. "Jay Powell has to do a lot of catching up to deal with the inflation problem he has right now. We're getting ready to see a major shift, and it's going to have a lot of consequences for a variety of asset prices." — referring to
4. "It's going to be tough sledding for the inflation trades of the pandemic going forward. The things that performed the best since March 2020 are probably going to perform the worst as we go through this tightening cycle." — Jones noted some companies are still gorging themselves on cheap debt, and predicted their stock prices would fall as interest rates climb to 2% over the next couple of years.
5. "Commodities are so incredibly undervalued relative to financial assets. One would think on a relative basis, as we go through this tightening, that commodities would outperform financial assets by a wide margin."
6. "Being just, and being in line with Americans' views on what is just, is great for business." — Jones asserted that the companies that lead the pack on issues such as pay transparency and climate change tend to outperform their rivals over the long term.
- An American tourist in Seoul said he sprayed graffiti in 155 places to raise awareness about teeth grinding
- X could lose $75 million in ad revenue after a litany of controversies from Elon Musk, including his endorsement of antisemitic comments, report says
- The S&P 500 will trade near its all-time high before a recession drags it down again in a topsy-turvy 2024, Société Générale says
- White collar roles more at threat from AI
- Market cap of BSE-listed firms hits record high of Rs 331 lakh crore; just shy of entering $4-trillion club
- 10 Best honeymoon places near Delhi
- Samsung launches new smartphone with 50 MP camera in India
- Unveiling the sweet side of corn: 7 mouthwatering recipes