Scott Minerd or Guggenheim Partners has some good news – and some bad news – for stock market investors. First,…
Scott Minerd or Guggenheim Partners has some good news – and some bad news – for stock market investors.
First, the good news: If investors are smarting from a blowgeoning that has racked up withing weekly losses for the Dow Jones Industrial Average
the S & P 500
and the Nasdaq Composite Index
Minerd, chief investment officer for Guggenheim and one of the world’s leading bond fund managers, said on Friday that the Recent routing has left the market relatively cheap, compared to its previous high levels, and that has created potential for stocks to surge higher in the next few weeks and months: “Stocks are cheap based on forward multiples and should rally by 15% -20 % from here unless policy uncertainty around China and tariffs remains in place, “Minerd tweeted.
Minerd’s current views are particularly noteworthy because he has held a particularly sobering market forecast even during the more ebullient moments earlier in the summer. He’s worried that the U.S. trade battle with China will intensify into something more menacing for global economies.
In the summer, Minerd warned that investors should not be lulled into a false sense of security.
Against that backdrop, the bad news is that Minerd sees stocks falling 40% or 50% after the surge is anticipated, as the Fed continues to raise interest rates until the end of 2019, which is likely to suck the air out of the market. Minerd predicted a bear market, or a drop of at least 20% from a recent peak, in the second quarter of 2020.
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