Peter Kraus Wary Of A 15% Correction Ahead

February 7, 2021

(Bloomberg) Wall Street veteran Peter Kraus said that investors shouldn’t be caught off guard by a market correction because some equities have been pushed into bubble territory, and many catalysts for expansion have already been factored in.

“You’ve got to pay attention to those bubbles, and the market could easily have a consolidation of 10% to 15% and nobody should be surprised,” the Aperture Investors founder said Friday in a Bloomberg Television interview. Though many investors believe U.S. President Joe Biden will push through a large relief package, “a lot of the stimulus is already in the price.”

Kraus joins those sounding an alarm about bubbles after retail investors pushed up stocks such as GameStop Corp. and AMC Entertainment Holdings Inc., creating volatility among various equities. The former co-head of Goldman Sachs Group Inc.’s asset-management arm and chief executive officer of AllianceBernstein Holding LP, Kraus formed his new firm more than two years ago, and his comments came as equities have hit new highs. He also renewed a warning about inflation.

“The amount of stimulus that the U.S. government is going to actually put into the economy is likely to be north of $5 trillion. The Fed’s balance sheet has doubled,” he said. “That all can’t happen without affecting inflation. And as inflation rises, real rates could actually turn positive, and that will be an impact on those stocks that are overvalued.”

Peter Kraus Wary Of A 15% Correction Ahead

Popular

Vanguard Launches "Expert Insights," Equipping Advisors With AI-Powered Portfolio Analysis Expertise

'The End Of The Road': Market Heavyweights Michael Burry And Jeff Gundlach Eye Trouble Ahead For Private Credit

Campbell’s Soup Heirs, Colleges Fight Over $65 Million Endowment

Portfolio Construction Remains The Dominant Determinant Of Long-Term Investment Outcomes

Jamie Dimon Highlights Iran War, Private Credit, And AI-Driven Job Losses As Major US Risks In His Annual Letter

More Articles

Bond Market Momentum Shifts Bears’ Way as Sell Signals Flash

Americans Are Using AI For Financial Advice More Than You Think