Scott Minerd, global chief investment officer at financial firm Guggenheim, predicts the stock market could drop 15% by November, according to a Business Insider report. He accuses the economic recovery, noting that central banks have “no exit plan”.
Scott Minerd, global chief investment officer at financial firm Guggenheim, predicts the stock market could drop 15% by November, according to a Business Insider report. He blames the economic stimulus, noting that central banks have “no exit plan.”
“At the moment, we’re just addicted to this,” he said earlier this week at the Milken Institute’s 2021 global conference. He explained that central banks have lent $ 2.3 trillion in much needed support to local businesses, households, financial markets, and state and local governments during the pandemic. However, central banks are now in a position to “rule the markets”, he said, without a clear exit strategy to withdraw the stimulus measures.
There is also the concern about inflation, writes BusinessInsider.com. Michael Burry of The Big Short, as well as investment experts Leon Cooperman and Carl Icahn also warned against over-stimulating the economy by the Fed.
The Fed is expected to start cutting its bond purchases in December, according to BusinessInsider.com. An official announcement could be made at the Federal Open Markets Committee meeting in November.
Biden’s stimulus package has also been blamed for rapid inflation in 2021, with a tight labor market, increasing demand for goods and services as bottlenecks end and supply chain challenges creating “The perfect storm for inflation,” GOBankingRates reported last month.
The Dow Jones Industrial Average opened slightly this morning, breaking just above the $ 35,550 mark, within 100 points of its 52-week high. The market was supported by Apple, Tesla and the new Bitcoin futures ETF.
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This article originally appeared on GOBankingRates.com: Stimulus money could cause the stock market to dip 15% by November