![]() Moreover, he's cautioned that the Fed may balk at stepping in to shore up asset prices, given the risk of exacerbating inflation. ![]() He's also noted that blistering but brief rallies are common during market downturns. He also tweeted a single word of advice to investors: "Sell."īurry has previously warned the S&P 500 could plummet by more than 50% to around 1,900 points. He shared a similar chart in January, circling in red the S&P 500's rally between September 2001 and March 2002, before it bottomed six months later. The Scion Asset Management chief has been pounding the alarm on stocks this year. He seems to expect both the S&P 500 and the Fed Funds rate to eventually tumble - as they did during the dot-com crash - with the Fed cutting rates as the economy weakens and asset prices slump. However, investors have piled back into stocks this year, driving the benchmark index up 9% and its tech-heavy peer up 17% year to date.īurry's latest chart and comment suggest he sees shades of the stock market's surge in early 2001, when rates were 6%. Yet they also dampen demand, which can erode corporate profits, pull down asset prices, and temper economic growth, lifting the risk of a recession.įears of soaring prices, aggressive rate hikes, and a painful economic downturn sent the S&P 500 down 19% and the Nasdaq Composite 33% lower in 2022. Higher rates encourage saving instead of spending and investing, and make borrowing more expensive, which can relieve upward pressure on prices.
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