Investors are already hitting stocks and leading cryptocurrencies in a debilitating market, according to "Big Short" investor Michael Burry. It could be only half of the downturn.
Scion Capital Management boss Burry says corporate earnings are impacted by rising inflation and Federal Reserve rate hikes that are squeezing major stock indexes and crypto tokens. I warned you.
"Inflation-adjusted first half of 2022 S&P 500 decreased 25-26%, Nasdaq decreased 34-35%, Bitcoin decreased 64-65%," Burry said. Tweeted on Thursday. "It was multiple compressions. Next is revenue compressions, so maybe it's on the way."
The broad-based S&P 500 is the worst first half since 1970. I finished the performance. Technology-intensive Nasdaq recorded the worst quarters since 2008 and the worst first half ever.
Meanwhile, Bitcoin'sprice has fallen by more than 70% from its record high of $ 69,000 last Novembersome crypto companies have scrambled. "Cryptocurrency winter."
Goldman Sachs analysts said current market levels are only priced in a slight recession and warned that more rapid stock sales are still possible. .. "Many of this year's valuation downgrades were due to higher interest rates / inflation," Goldman analysts said in a Thursday memo, according to Bloomberg. "Unless bond yields begin to fall and the rise in the equity risk premium due to the fear of a recession is mitigated, equity valuations could decline further."
Like Barry, bank strategists said We predicted that corporate profits could worsen in the second half of the year as rising costs and slowing personal consumption put pressure on profits.
Barry is up to date on the same day the Fed likes Inflation gauges, which issued the warning, showed highs for decades.
Inflation shows signs of leveling off, but the latest Commerce Department data also shows a slowdown in consumer spending. This is a alarming sign as more banks warn of the high risk of a recession.
Earlier this week, Barry said the Fed was reversing the direction of its sharp rate hike plans as some retailersshowed signs of fighting the "Bullwhip effect". Insisted that it could cause. A chain phenomenon in which product demand forecasts do not match actual sales and inventory levels fluctuate significantly.
Barry lowers prices for retailers to get rid of them It suggested that it would be forced to overstock, thereby cooling inflation and relieving the Fed's rate hike pressure.
Barry, whose bet on the subprime housing crisis was recorded in the 2015 movie The Big Short,also predicts the future division of the labor market – white-collar Employees are facing potential to reduce while the demand for blue-collar workers remains high.
