Leon Cooperman Predicts Stock Market Downturn and Long-Term Rates Rise: ‘I Think You Should Take a Cautious View’

Renowned investor Leon Coopermann issued a warning about the stock market, citing the potential for a downturn. Long-term interest rates are also expected to rise.

What happened: Cooperman, chairman and CEO of Omega Family Office, expressed his concerns about the future of the stock market during an interview with CNBC’s “Squawk Box” on Monday. He believes that current stock prices are too high and could soon decline. He also foresees the possibility of an increase in long-term interest rates.

Cooperman’s remarks come at a time when the stock market has shown resilience, despite concerns about inflation and the Federal Reserve’s monetary policy.

“I think the Fed will cut rates in the short term, maybe two or three times. Forget the six times that the market was pricing in, but I think the long end will go up,” Cooperman said. “The 10 years [at] 4%, 5% or more wouldn’t be a big surprise.”

“I think we’re going to have inflation,” Cooperman said. “I’m not calling for recession. We borrow for the future. That’s why the market has done so well… I think you have to take a cautious view.”

See also: PLTR, NVDA, LLY, SYM, TSLA: Top 5 Trending Stocks Today

Because matter: Cooperman’s warning is significant considering his track record and current market conditions. In January, major investors were confident the market would not face a recession in 2024, with many supporting the “long Magnificent Seven” trade. However, Cooperman’s recent warning suggests a potential shift in market sentiment.

Cooperman’s concerns are also in line with those raised by other market experts. Fund manager Cole Smead warned that the U.S. stock market may be in a precarious position due to robust job numbers and wage growth, suggesting that the Federal Reserve’s interest rate hikes may not have the desired impact.

However, not all market experts share this pessimistic view. Fundstrat Tom Lee highlighted stock market strength in 2024, despite concerns about corporate earnings and the timing of Fed rate hikes. The Fed’s recent meeting did not suggest any imminent rate cuts until inflation is under control, a sentiment echoed by the Fed president Jerome Powell in a “60 Minutes” interview.

Read next: If You Invested $1000 In Apple When Steve Jobs Returned To Apple 28 Years Ago, Here’s How Much You’d Have Had

Image via Shutterstock

Designed by
Benzinga NeuroBy

Kaustubh Bagalkote

The GPT-4-based Benzinga Neuro content generation system leverages Benzinga’s extensive ecosystem, including native data, APIs, and more to create rich, timely stories for you. Learn more.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *