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

Billionaire investor Bill Ackman Is Suddenly Bullish On OpenAI Partner Microsoft

The S&P Rally Has Created A Favorable Environment For Retail Investors

US Debt Could Interfere With Warsh's Attempt To Shrink The Fed's Balance Sheet

Ted Turner's Children Won't Inherit Most Of His Fortune? Know Where CNN Founder's Billions May Go

Halo Investing’s Aura: The Tool That Finally Makes Structured Notes Portfolio Ready

More Articles

Envestnet's Five Year Plan Includes Investment In Research And Development

401(k) Savers Play It Safe, Even As Demand For Private Assets Surges