The securities market fell significantly after President Trump announced widespread fares on April 2. The so -called announcement of the “Liberation Day” included higher fare rates than expected, forcing investors to restore the expectations of the US economy and corporate income.
Given the recent data, a potential slowdown in the United States may already be underway and the risk that rates can push us towards a direct recession, there is a long shadow on stocks, since the valuation of the actions prices is largely determined by future expectations of income and profit growth.
Historically, strong sales as if we attend the S&P 500 and Nasdaq Composite, which dropped by 17% and 22% at the beginning of April 4, respectively, since their highs in January, they create opportunities for the risk of “immersion”.
The potential that the investors hunt has caught the attention of the veteran Wall Street bonus, Bill Gross. Gross has been navigating the markets since 1971 and co -founded Pacific Investment Management CO, or PIMCO, a mass company with $ 2 trillion under management. In the past, he managed more than $ 270 million through the PIMCO total return fund, winning -the nickname “King King” before moving to the investors of Janus Henderson from 2014 to 2019.
Gross has seen a lot during his 50 years of his career and offered a forceful message about the stock market this week.
The legendary investor Bill Gross offered a forceful message to the bag investors after the rates made the S&P 500 sold to Selloff.Bloomberg & Sol; Getty Images
The Federal Reserve has a double mandate to guide in low inflation and unemployment, two often opposing goals that the Fed can leave behind the curve when it comes to changing monetary policy.
For example, increasing interest rates slowed down economic activity, inflation. However, it also leads to layoffs, which we are currently experiencing.
After incorrectly predicting in 2021 that inflation would be transient, Fed President Jerome Powell ended the most restrictive and puzzling rates of interest since then, President Paul Volcker fought inflation in the early 1980’s.
However, delaying the fight against inflation contributed to 8% inflation by 2022. While inflation has been withdrawn, it is cumulative, so the damage associated with hesitation is still being felt.
A labor market weakening partly caused by higher rates that maintained a lid in economic activity prompted the Fed to reduce the rates in the fourth quarter. However, inflation has increased to 2.8% in February from 2.4% in September, leading the Fed to the most cut pause.
Unfortunately, pause has not helped to relive the growth of work. According to the Office of Labor Statistics, the unemployment rate in February amounted to 4.2%, up to 3.5% until 2023.
And 275,000 north -Americans lost their job in March, according to Challenger, Gray and Christmas, partly due to the work cuts of the Government efficiency department (DOGE). The number of layoffs grew 205% year -on -year. It was the largest month of layoffs, as Covid shouted the economy by 2020.
What happens next to the economy is uncertain, but the increase in unemployment and inflation that took place again is not a great recipe. On the other hand, President Trump’s rate risks promoting the inflation fire and, as consumers are already trapped in cash, can affect the growth of corporate profits and profits.
Bill Gross’s Wall Street experience has long seen many octopus and drops in the market, including Nifty 50 inflation, the inflation that fired in the 1970’s, the S&L crisis in the late 1980’s and early 90’s, the boom and internet bust, the great recession, Covid and the Bear 2002 market.
In short, Gross has been around the blog, making this week take the markets, especially worrying.
“Investors should not try to” take a falling knife “” wrote dirty In an email to Bloomberg.
Buying the immersion at the S&P 500 has been a winning strategy historically, but the pain was supported as stocks find that its fund can be difficult to endure. And it may take years to recover loss. The situation is worse for individual stocks, which can never return to the above (Cisco Systems ((CscoThat) It still traces below its 1999 peak).
“This is an epic economic and market event similar to 1971 and the end of the gold standard, except with immediate negative consequences,” said Gross.
In the early 1970’s, a collection of 50 main stocks was considered “a decision”, only to buy. The money was concentrated within them, establishing a significant fall in the market when they reached the peak in 1972. Sound family?
It is not clear what will happen next. President Fed, Powell, admitted that he believed that the fare impact will be worse than the forecast above, perhaps re -establishing rates cuts. President Trump, meanwhile, is in the waves he presses to reduce the rates, a strategy that has not worked in the past.
Perhaps the recent fall of the market will promote negotiations that reduce the rates, alleviating their impact. But that’s left to see, and Gross is not convinced.
“Trump can’t go back -at no time,” said Gross. “It’s too sexist for that.”
“Time for a Shenzhen Like City …”: The post Sparks debate by Anand Mahindra; Internet users play noida, pune, chennai and more
In the early 1980’s, Shenzhen was a quiet fishing village on the southern coast of China. Today, it is a giant of global technology, which is the home of companies…
itstargetnews
