Hedge fund billionaire Steve Cohen expects a recession to come and go quickly before a stock market rally in 2024

Steve Cohen SAC Capital

REUTERS/Steve Marcus

  • Billionaire hedge fund boss Steve Cohen would not count on a deep recession or a protracted market downturn.

  • He stated a downturn may appear to be a “faux scare” which will shock traders, however it will likely be temporary.

  • Cohen stated his hedge fund, Point72, maintains a “fairly constructive” outlook on the economic system.

Steve Cohen, the billionaire chief of hedge fund Point72 and the proprietor of the New York Mets, has an upbeat outlook for the US economic system and monetary markets.

In feedback shared Wednesday at a Robinhood Convention, per Fortune, he stated a short-lived recession may hit the US earlier than the top of this 12 months. It may take the form of a “faux scare” that briefly spooks traders however the repercussions will not final.

“It is solely going to be short-term in nature,” Cohen stated, including that his agency maintains a “fairly constructive” outlook for the economic system.

On Thursday, actual gross home product knowledge confirmed the US economic system grew at a 4.9% annualized charge within the third quarter.  Cohen stated he predicts financial progress to extend in 2024 and shares to climb 3%-5%, which may in the end spur the Fed to maintain rates of interest “larger than folks assume,” the report stated.

Earlier this week, investing pioneer Rob Arnott shared a contrasting outlook for the economic system this week. He informed CNBC that the economic system’s current signal of power shouldn’t be taken as reassurance for a no-recession situation.

“Individuals will say that recessions do not begin with a booming economic system,” Arnott stated. “That is not true. Recessions at all times begin with an economic system that is been booming. It is the character of the height and the rolling over.”

In the meantime, Jerome Powell and different central financial institution officers have shared divided takes on the trail of financial coverage. Inflation stays almost double the Fed’s 2% goal, although CME’s FedWatch Software reveals markets don’t count on a charge hike in November or December.

Further proof of persistently above-trend progress, or that tightness within the labor market is not easing, may put additional progress on inflation in danger and will warrant additional tightening of financial coverage,” Powell stated in feedback October 19.

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