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Blackstone COO: "Stocks Could Fall As Much As 20% This Year"

Blackstone COO: "Stocks Could Fall As Much As 20% This Year"

As we discussed just minutes ago, with market volatility surging (and sliding), opinions about what happens next to the market are coming just as fast and furious, and while two noted technicians, Evercore ISI's Rich Ross and Oppenheimer's Ari Wald predicted that the selloff is almost over, more "fundamental" strategists are less sanguine.

Speaking to CNBC, Blackstone's bilionaire President and COO Tony James said that equity markets could fall as much as 20% this year: "Every historic norm says that stocks are very, very fully valued," James said on Monday, adding that the market decline could be 10% to 20%

Echoing familiar concerns, James said that since the U.S. economy has been picking up for a while, any further stimulus from recent tax cuts may not have been necessary, and in fact could be destructive: "If you’re worried about interest rates and inflation, the stimulus could be the thing that tips us over into a rate spike," James said.

Does this means that James is out of the stock market? In the interview, the Blackstone president said that he is investing his personal money in New York-based Blackstone’s products, and also holds floating-rate bank debt instruments yielding about 6%.

Separately, Guggenheim Partners CIO Scott Minerd also commented on the fate of the rally, saying that in a "Bull markets don’t die from old age. They typically get shot in the head."

Two weeks ago, Minerd prudently warned that Davos might be a flashing contrarian indicator and that investors should consider the positive message from what MarketWatch dubbed the "gilded boondoggle" as a potential reason to sell. In retrospect, he was right.

Continued: https://www.zerohedge.com/news/2018-02-05/blackstone-coo-stocks-could-fall-much-20-year