According to investor and billionaire, David Tepper, Fed will keep raising rates
Aa
Share
David Tepper says he believes the Fed 's announcements, unlike most investors. And he admits that if the Fed delivers on those promises, it won't be good for stocks and bonds. Billionaire and investor David Tepper, founder of Appaloosa Management, fears that further tightening of monetary policy by central banks will hurt the stock market. He is confident that the US Federal Reserve will continue to raise rates, as will other central banks.
David Tepper leans towards shorts
"I'm leaning towards shorts in the stock and bond markets. I think it just doesn't make sense to risk betting upside when I see so many central banks making it clear what they're going to do," he told CNBC's on Thursday. Squawk Box. "Right now, it's hard to think of solid S&P 500 long returns, " he added.
The investor notes that the Federal Reserve and the European Central Bank have signaled to investors that they intend to continue raising interest rates in the future. “Although the prices of goods are falling somewhat, central bankers are concerned about the persistent increase in the prices of services against the backdrop of structural labor shortages. As such, central banks are going to keep rates high for a while, and I don't want to ignore what people in these positions are telling me," Tepper said.
Read next: USA: The weakest year since 1990 - IPO market acquired "only" $7bn| FXMAG.COM
The billionaire believes the announcements of the Fed
The investor adds that the market is not entirely convinced that the Fed will implement its announcements of further monetary policy tightening. “I always believe the Fed bankers . I believed them in the past and I believe them now."
Recall that the most important US index S&P500 has fallen by about 20% this year. Much of this is a contribution from the Fed 's actions , as the Federal Reserve implemented hawkish monetary policy to fight inflation, which drove interest rates up. Higher rates reduce the value of future earnings and have a negative impact on equity valuation multiples.
Tepper is regarded as one of the best hedge fund managers . He is known in the industry for his accurate market forecasts, especially accurate after the recent financial crisis.
Tepper 's net worth is estimated at $18.5 billion. For many years he was associated with the Goldman Sachs bank. In 1993, he founded his investment company Appaloosa Management, which became famous for, among others, generating 61% of the profit in 2001.
Tepper 's equity portfolio is worth approximately $4 billion. It includes shares of companies such as Alphabet , Facebook, Micron Technology, Amazon, but also General Motors or Goodyear.
TOP 10 items in D. Tepper's portfolio
Source: hedgefollow.com
