US may see ‘severely limited’ growth even after epidemic, warns top hedge fund executions

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‘Many countries have done a better job of dealing with the virus without printing their budget deficit and money.’

He is Bob Prince, co-chief investment officer of the world’s largest hedge fund at Bridgewater Associates, who in a recent interview explained to Bloomberg why the US is seeing limited economic growth even after the epidemic.

Going forward, he said, fiscal policy will continue to be the main source of stimulus, which will only serve to fuel the growing pile of debt and pressurize exchange rates. According to Prince, it is a problem worldwide, but it is more acute outside Asia.

“Global investors are very Western-focused,” he said. “Many countries have done a better job of dealing with the virus without printing their budget deficit and money. “

Prince clarified that China’s economy, for example, is “too close to normal”, as property prices are in most parts of Asia, something that investors have to keep in mind.

“There is substantial economic divergence between East and West,” he said. “As investors, you shouldn’t let yourself be completely locked in the West.”

See full interview:

Meanwhile, in terms of the stock market and economy, the US is in the midst of a relatively calm stretch, according to Scott Minor of Guggenheim Partners, who warned that the 2020 domestic stretch could turn into a massive top. Election.

“The market performance and recovery of the economy is quiet compared to the volatility of March and April,” a note reads, but several issues concern me.

Minerd warned that receiving trillions of dollars from the Federal Reserve helped mitigate some of the major financial issues created by the coronovirus epidemic, with investors not facing uncertainties. “Without fiscal stimulus, personal income will stabilize, job gains will slow, consumers will pull back, and more small and medium-sized businesses will fail,” he explained. “The economic decline from lack of fiscal functions increases the probability of a negative fourth-quarter GDP print while Main Street remains in a depression.”

Shares also continue to pick up as investors have so many reasons to be skittish. So far this month, the Dow Jones Industrial Average DJIA,
2.2% has been added as S&P 500 SPX,
+ 0.34%.
Tech-Heavy Nasdaq Composite Index Comp
+ 0.36%
Even better, with a 3.1% gain.


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