Peter Kraus Wary Of A 15% Correction Ahead

The Wealth Advisor Contributor

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

When Bitcoin Prices Turned Against Michael Saylor, He Quietly Pivoted To Risky Financial Gambit At Strategy

Cathie Wood’s ARKK Takes Fresh Hit After Falling 50% Since Covid

Investor Dan Ives Says The Tech Selloff That Has Been Spooking Markets Is Actually A ‘Generational Opportunity’ To Get In On The Action

Robert Duvall's Fortune Of Between 50 And 70 Million Dollars That His Fourth Wife Could Inherit Entirely

Apple Decouples From Nasdaq, Offering Alternative To AI-Fueled Volatility

More Articles

Why Wall Street's Dr. Doom Now Embraces Optimism

Banking Groups Urge US Treasury to Improve Security After Email Hack