Home / Entertainment / Druckenmiller warns that the stock market is a big "mirage" at this moment

Druckenmiller warns that the stock market is a big "mirage" at this moment



We are one day closer to see if the president of the Fed, Jerome Powell, launches a lifesaver to this market.

If the Federal Reserve retains an expected rate increase for a long time, it can thank investor legend Stanley Druckenmiller and Fed governor in the 2008 era, Kevin Warsh, says Kevin Muir, Macro Tourist's blog, in reference to an article of recent opinion in The Wall Street Journal in what the two warned the central bank has lost its window for such a move.

"This opinion piece is a much bigger deal than most market participants currently appreciate," says Muir, who believes that the combined power of the two could exert some influence. Warsh, the "world's biggest legitimate hawk," has "given tons of coverage for Powell to err on the moderate side," he says.

And while Santa Claus definitely has a lot of work for him if that year-end rally is still approaching, Muir believes that a Fed pause will mean a rally for the shares.

Opinion: Santa Claus comes to Wall Street – after Christmas

But do not refer to Druckenmiller as a bull, as our call of the day It comes from the man himself who suggests that the stock market is concerned about closer inspection. In an interview with Bloomberg Television, Druckenmiller says the Fed is seeing "a bit of a mirage" with only a 13% drop – this quarter – for the S & P 500.

"Because if you look inside the stock market … the front-end cyclicals show a completely different image to the defensive parts of the market. Automotive stocks have fallen by 30%, are not 10% or 11%, construction stocks have fallen by 35%, banks … have fallen by 25% … Russell has fallen by 20%, Retail stocks have fallen more than 20%. How in the world can the S & P 500 lower only 10% or 11%? "That's because public utilities, basic products and pharmaceutical products, economically defensive actions, are rising," he says.

Read: The largest stocks that are in a bear market at this time.

"The inside of the stock market, which is the best economist I know and have used in all cycles when I invested, is saying that there is something that is not there," said Druckenmiller.

He added that since 2010, corporate non-financial debt has increased to $ 6 trillion of $ 9.6 trillion and during that time corporate profits have increased by 27%. And the only way to explain a 60% increase in the S & P 500 during this time is "because all that money borrowed was used to finance repurchases and mergers and acquisitions", and the Fed encourages investors to take more risks and to POTUS to do more tax expenditures.

Druckenmiller said that the USA. UU They may be observing a situation similar to that of 2007, although they are not forecasting a recession like some, not even advocating a rate cut. He also told Bloomberg that he is the owner of Treasurys, which has few financial stocks and believes that cloud computing shares such as Microsoft

MSFT, -2.96%

and Salesforce

CRM -4.53%

It will surpass even if the economy contracts.

But in the next three or five years, yields will not be a field day, says the investor that MoneyWeek once referred to as one of the "biggest investors in the world."

The market

Dow

YMH9, + 0.56%

S & P 500

ESH9, + 0.55%

and Nasdaq

NQH9, + 0.55%

Futures indicate a rebound at the beginning of the negotiation. Monday's attack saw the Dow.

DJIA, -2.11%

Drop 500 points and the S & P.

SPX, -2.08%

and Nasdaq

COMP, -2.27%

Post 52 weeks fresh closing minimum.

Meanwhile, raw

CLH9, -2.24%

CLH9, -2.24%

is pushing new lows of 14 months of its own. The dollar

DXY, -0.26%

it is flat and gold

GCZ8, + 0.01%

is not going anywhere Asia markets

ADOW, -1.15%

It had an approximate session, while the European markets.

SXXP, -0.27%

they have fought

Check out Market Snapshot for more coverage

Plus: The last key death cross is ready to gobble up the stock market

The graphic

The monthly survey of Merrill Lynch fund manager at Bank of America is out and there is a new winner in the "busiest trade" category. Congratulations American dollar. Our letter of the day from B. de A. strategists shows how the "Long FAANG + BAT" (Facebook

FULL BOARD, -2.69%

Amazon

AMZN, -4.46%

Apple

AAPL, -0.93%

Netflix

NFLX, -1.51%

Google Alphabet

GOOGL, -2.48%

In addition to the giants of Chinese technology Baidu

BIDU, -4.33%

Alibaba

SLIME -3.37%

and Tencent

0700, -1.94%

) call has renounced the throne after 10 months dominating as the most popular position among investors.



Bank of America Merrill Lynch

As the Times notes, more than half of the 3% swings have occurred since October, and things do not seem to be calming as we head for the holidays.

The buzz

Oracle

ORCL, -1.87%

He is awake after being surprised by Monday's solid earnings, but those results received a big help from the repurchases of important stocks. Nike

NKE, -3.63%

will report after Thursday's close and analysts' expectations are high, maybe too high.

Jose Mourinho leaves at Manchester United

MANU, -1.09%

, in the middle of the team's worst season in 28 years.

Johnson and Johnson

JNJ, -2.90%

He says he will buy up to $ 5 billion in shares again.

Thirty-one civil rights groups are calling Facebook

FULL BOARD, -2.69%

CEO Mark Zuckerberg will step down as chairman of the board and Operations Director Sheryl Sandberg will leave the board altogether.

The board of the CBS

CBS, -2.56%

says that the former CEO, Les Moonves, will not receive his $ 120 million gold parachute.

Do not forget to check our annual list of the ones you must follow in Finance Twitter

TWTR, -6.80%

The economy

The long-awaited two-day Fed meeting begins on Tuesday. Before that, housing starts in November and building permits exceeded forecasts.

Read: The Fed must carry out a complicated balancing act,

The phrase


Reuters

Chinese President Xi Jinping

"No one is in a position to dictate to the Chinese what should or should not be done." Cancel the Affordable Care Act. "- That was the president of China, Xi Jinping, perhaps in a commercial coup, while speaking at the Central Economic Center, Labor Conference Tuesday, however, the markets did not get exactly what they wanted, without major announcements, although There have been comments about tax cuts intended to stimulate the economy.

The stat

202 years: that is the time that will take the wage gap between men and women to finally close, says the World Economic Forum in its Annual Report on the gender gap in the world. And that's a small improvement over last year's results.

Random readings

Cannabis oil could take the British to the Indonesian prison for 15 years

Porch pirates will want to avoid the crouching of this NASA engineer.

Roger Stone apologizes for all those lies in InfoWars

Chicago mourns two police officers after subway accident

The need to know starts early and is updated until the opening bell, but sign up here to be delivered once in your email box. Make sure you check the article Need to know. The version sent by email will be sent around 7:30 a.m. East.

Follow MarketWatch on Twitter, Instagram, Facebook.

Provide critical information for the trading day of the United States. Subscribe to the free Need to Know newsletter from MarketWatch. Sign up here.


Source link

Home / Business / Druckenmiller warns that the stock market is a big "mirage" at this moment

Druckenmiller warns that the stock market is a big "mirage" at this moment



We are one day closer to see if the president of the Fed, Jerome Powell, launches a lifesaver to this market.

If the Federal Reserve retains an expected rate increase for a long time, it can thank investor legend Stanley Druckenmiller and Fed governor in the 2008 era, Kevin Warsh, says Kevin Muir, Macro Tourist's blog, in reference to an article of recent opinion in The Wall Street Journal in what the two warned the central bank has lost its window for such a move.

"This opinion piece is a much bigger deal than most market participants currently appreciate," says Muir, who believes that the combined power of the two could exert some influence. Warsh, the "world's biggest legitimate hawk," has "given tons of coverage for Powell to err on the moderate side," he says.

And while Santa Claus definitely has a lot of work for him if that year-end rally is still approaching, Muir believes that a Fed pause will mean a rally for the shares.

But do not refer to Druckenmiller as a bull, as our call of the day It comes from the man himself who suggests that the stock market is concerned about closer inspection. In an interview with Bloomberg Television, Druckenmiller says the Fed is seeing "a bit of a mirage" with only a 13% drop – this quarter – for the S & P 500.

"Because if you look inside the stock market … the front-end cyclicals show a completely different image to the defensive parts of the market. Automotive stocks have fallen by 30%, are not 10% or 11%, construction stocks have fallen by 35%, banks … have fallen by 25% … Russell has fallen by 20%, Retail stocks have fallen more than 20%. How in the world can the S & P 500 lower only 10% or 11%? "That's because public utilities, basic products and pharmaceutical products, economically defensive actions, are rising," he says.

Read: The largest stocks that are in a bear market at this time.

"The inside of the stock market, which is the best economist I know and have used in all cycles when I invested, is saying that there is something that is not there," said Druckenmiller.

He added that since 2010, corporate non-financial debt has increased to $ 6 trillion of $ 9.6 trillion and during that time corporate profits have increased by 27%. And the only way to explain a 60% increase in the S & P 500 during this time is "because all that money borrowed was used to finance repurchases and mergers and acquisitions", and the Fed encourages investors to take more risks and to POTUS to do more tax expenditures.

Druckenmiller said that the USA. UU They may be observing a situation similar to that of 2007, although they are not forecasting a recession like some, not even advocating a rate cut. He also told Bloomberg that he is the owner of Treasurys, which has few financial stocks and believes that cloud computing shares such as Microsoft

MSFT, -2.96%

and Salesforce

CRM -4.53%

It will surpass even if the economy contracts.

But in the next three or five years, yields will not be a field day, says the investor that MoneyWeek once referred to as one of the "biggest investors in the world."

The market

Dow

YMH9, + 0.56%

S & P 500

ESH9, + 0.54%

and Nasdaq

NQH9, + 0.55%

Futures indicate a rebound at the beginning of the negotiation. Monday's attack saw the Dow.

DJIA, -2.11%

Drop 500 points and the S & P.

SPX, -2.08%

and Nasdaq

COMP, -2.27%

Post 52 weeks fresh closing minimum.

Meanwhile, raw

CLH9, -2.24%

CLH9, -2.24%

is pushing new lows of 14 months of its own. The dollar

DXY, -0.26%

it is flat and gold

GCZ8, + 0.01%

is not going anywhere Asia markets

ADOW, -1.15%

It had an approximate session, while the European markets.

SXXP, -0.27%

they have fought

Check out Market Snapshot for more coverage

Plus: The last key death cross is ready to gobble up the stock market

The graphic

The monthly survey of Merrill Lynch fund manager at Bank of America is out and there is a new winner in the "busiest trade" category. Congratulations American dollar. Our letter of the day from B. de A. strategists shows how the "Long FAANG + BAT" (Facebook

FULL BOARD, -2.69%

Amazon

AMZN, -4.46%

Apple

AAPL, -0.93%

Netflix

NFLX, -1.51%

Google Alphabet

GOOGL, -2.48%

In addition to the giants of Chinese technology Baidu

BIDU, -4.33%

Alibaba

SLIME -3.37%

and Tencent

0700, -1.94%

) call has renounced the throne after 10 months dominating as the most popular position among investors.



Bank of America Merrill Lynch

As the Times notes, more than half of the 3% swings have occurred since October, and things do not seem to be calming as we head for the holidays.

The buzz

Oracle

ORCL, -1.87%

He is awake after being surprised by Monday's solid earnings, but those results received a big help from the repurchases of important stocks. Nike

NKE, -3.63%

will report after Thursday's close and analysts' expectations are high, maybe too high.

Johnson and Johnson

JNJ, -2.90%

He says he will buy up to $ 5 billion in shares again.

Thirty-one civil rights groups are calling Facebook

FULL BOARD, -2.69%

CEO Mark Zuckerberg will step down as chairman of the board and Operations Director Sheryl Sandberg will leave the board altogether.

The board of the CBS

CBS, -2.56%

says that the former CEO, Les Moonves, will not receive his $ 120 million gold parachute.

Do not forget to check our annual list of the ones you must follow in Finance Twitter

TWTR, -6.80%

The economy

The long-awaited two-day Fed meeting begins on Tuesday. Before that, housing starts in November and building permits exceeded forecasts.

Read: The Fed must carry out a complicated balancing act,

The phrase


Reuters

Chinese President Xi Jinping

"No one is in a position to dictate to the Chinese what should or should not be done." Cancel the Affordable Care Act. "- That was the president of China, Xi Jinping, perhaps in a commercial coup, while speaking at the Central Economic Center, Labor Conference Tuesday, however, the markets did not get exactly what they wanted, without major announcements, although There have been comments about tax cuts intended to stimulate the economy.

The stat

202 years: that is the time that will take the wage gap between men and women to finally close, says the World Economic Forum in its Annual Report on the gender gap in the world. And that's a small improvement over last year's results.

Random readings

Cannabis oil could take the British to the Indonesian prison for 15 years

Porch pirates will want to avoid the crouching of this NASA engineer.

Roger Stone apologizes for all those lies in InfoWars

Chicago mourns two police officers after subway accident

The need to know starts early and is updated until the opening bell, but sign up here to be delivered once in your email box. Make sure you check the article Need to know. The version sent by email will be sent around 7:30 a.m. East.

Follow MarketWatch on Twitter, Instagram, Facebook.

Provide critical information for the trading day of the United States. Subscribe to the free Need to Know newsletter from MarketWatch. Sign up here.


Source link