“‘The stock market, typically, drops about 12% right before a recession. It’s probably going to happen at some point through some level.’”Thank you for reading this post, don't forget to subscribe!
– Paul Tudor Jones, Founder and CIO, Tudor Investment Corp.
Famed hedge-fund manager Paul Tudor Jones explained in an interview with CNBC on Tuesday morning why he is not bullish on U.S. stocks and other risky assets as he awaits a recession induced by the Federal Reserve’s aggressive monetary tightening.
Jones said it is difficult to remain positive on equities in what he described as “the most dangerous and challenging geopolitical environment I have ever seen,” which is “happening at the same time as the United States entering World War II.” “is in its weakest financial position since.” Second. These are really difficult times.”
The 2023 rally in US stocks has stalled, with the S&P 500 index SPX pulling back 5.5% from the 2023 high set on July 31, leaving the large-cap benchmark up 12.9% for the year as of Monday’s close. The Dow Jones Industrial Average DJIA is up just 1.4% so far this year.
Jones is widely credited with predicting and profiting from the stock-market crash of October 19, 1987, in which the Dow lost nearly 23% of its value, the largest one-day loss for the blue-chip benchmark. There was a percentage decline. its history.
So what does Jones like?
“I would love to have gold and Bitcoin together,” he said.
“I think [bitcoin and gold] “They’ll probably take up a larger percentage of your portfolio than historically because we’re going to go through a challenging political time in the United States and … we’ve obviously got a geopolitical situation in Israel and Ukraine,” Jones said. Said.
Bitcoin BTCUSD, +0.15% was down 0.8% Tuesday morning near $27,380 and is up about 65% so far in 2023. Gold GC00, -0.10% has retreated from highs above $2,000 an ounce earlier this year, falling below $1,850 last week. Treasury yields rose and the dollar strengthened.
Gold has seen a 1.4% surge this week as US bond yields fell, recently trading near $1,871 an ounce.
The investor said large, speculative short positions in gold will provide fuel for the rally as the recession takes hold.
“In a recession, the market is typically long assets like Bitcoin and gold,” he said. “So there’s probably $40 billion worth of purchases that have to come into gold at some point between now and if the recession actually comes.
“So yes, I like Bitcoin and I like gold right here,” Jones said.