Peter Borich says stocks could fall as bonds rise and the company’s earnings shrink.
The veteran trader says a policy mistake like a government shutdown could destroy the US economy.
Borish advises retail investors to take some of their gains from big tech companies and reorganize their portfolios.
Peter Borich warned that stocks are poised for a decline, and that any mistake by the federal government could lead to economic disaster.
“Do I think the S&P is likely to move down from here? Yes,” the veteran trader said during an episode of the show. Julia Laroche Gallery Released this week.
pointer Standard & Poor’s 500 It is up nearly 16% this year, driven by frantic buying of AI stocks and investors betting on The threat of inflation is overThe US economy will Avoid stagnationAnd the Federal Reserve will do that Undo a rate hike soon.
Borich, founding partner of billionaire Paul Tudor Jones’ Tudor Investments, noted that the appeal of equities has been dampened by higher returns on safer assets such as Treasury bills. Moreover, rising wages and energy costs threaten to erode corporate profits.
“I think there will be a bit of shrinking profits, which will push prices down,” he added.
Borich also noted the recent gains in the US dollar against other currencies, noting that a strong dollar has not historically been associated with big gains in equities. I have advised ordinary investors who making a package on stocks like Nvidia and Apple this year to cash out some of their dividends and rebalance their investment portfolios, even though “it’s the hardest thing in the world to do”.
Separately, the head of a computer trading company mentioned the risk of economic disaster.
“What worries me is not a recession “Or a superficial recession,” he said. “My concern is that if we make these colossal policy mistakes… the economy could fall off a cliff.”
Borich gave the hypothetical example of gridlock in Congress that led to yet another government shutdown. He warned that this could lead to higher short-term interest rates and stifle public spending, causing an economic slowdown.
Read the original article at Business interested