David Tepper Says the Market is Not Overheated

The head of Appaloosa Management is “rejecting arguments that stocks are overvalued and believes there are still plenty of opportunities,” according to a recent CNBC article. Tepper says “any comparisons to past overheated markets are ridiculous,” adding that while stocks do look expensive, higher multiples are supported by the global economy in which he believes growth will continue and earnings will improve. Tepper argues further that stocks are still inexpensive relative to interest rates, and any rate hikes from the Fed will be slow in coming. The article cites Tepper’s 2010 prediction that “either the market would rally on strong […]

Odds of Recession in U.S. are Modest, Higher in U.K.

While, historically, an inverted yield curve (short-term rates above long-term rates) has preceded the end of a bull market and the beginning of a recessionary environment, a recent Barron’s article argues that the risk in the U.S. is relatively modest. The article offers the example of how the U.S. stock market “peaked in 2000 and 2007 when the spread between three-month and 10-year U.S. Treasury yields inverted by about 50 basis points,” adding that while the yield curve is currently inverted to the tune of one percentage point, the spread has “narrowed in recent weeks.” Challenges continue in the U.K., […]

Bill Gross Forecasts Below-Par Economic Growth

In a recent article for Barron’s, fund manager Bill Gross argues that investors have “resorted to ‘making money with money’ as opposed to old-fashioned capitalism when money and profits were made with capital investment in the real economy.” This, he argues, will suppress real economic growth going forward. Gross explains that factors such as the replacement of workers with robots and trade-restrictive government policies present a “counterforce to creative capitalism in the real economy” which in turn causes investors to sense future threats to consumer demand and investment returns. So, instead of channeling dollars into the real economy, they turn […]

Bob Doll Says Economy Presents Risk to Stocks

More so than politics, the current economic landscape could pose problems for the stock market, writes Bob Doll in a recent Barron’s article. Nuveen Asset Management’s chief investment strategist contends that, while investors are focused on how political uncertainty could affect equities, “near-term economic disappointment is a bigger issue.” Nevertheless, Doll writes, Nuveen remains constructive toward equities and other risk assets over the medium- and long-term.” He shares the following insights: Consumer confidence is high. In March, the Consumer Confidence Index hit its highest level in 17 years, and Doll expects this to boost consumption going forward. Tax reform represents […]

Veteran Economist Suggests Trump Rally Caution

Contrarian economist David Rosenberg, chief economist and strategist at Toronto-based Gluskin Sheff & Associates, offers market insights in a recent interview with Barron’s. Here are some highlights: View on U.S. economy: “We’re going to average close to 2% real GDP growth this year, well below consensus.” Rosenberg doesn’t think the economy will “break out to the upside,” saying that there will be offsets to proposed tax relief, deregulation and capital repatriation including potential trade tariffs and protectionism. Aging baby boomers: “It doesn’t get a lot of press” says Rosenberg, “but it is extremely important.” He says there will be 1.5 […]