‘A Dangerous Looking Moment in Global Economics’ — Veteran Investor Jeremy Grantham Warns S&P 500 Could Plunge Another 26%

Jeremy Grantham, the co-founder of the Boston-based plus absorption steadfast Grantham, Mayo, & van Otterloo (GMO) believes Standard and Poor’s 500 (S&P 500) could driblet different 26% during the adjacent 12 months, according to statements the seasoned capitalist made past week. The GMO co-founder elaborate his bearish sentiment by mentioning he’s shorting junk bonds and the Nasdaq Composite arsenic well.

GMO Co-Founder Says ‘Deterioration successful Fundamentals’ Is Shocking — ‘Central Banks Will Be Spooked, They’ll Do What They Can, Maybe’

The capitalist and GMO co-founder Jeremy Grantham’s banal marketplace outlook is gloomy, and past Wednesday helium told the Reuters Global Markets Forum that things could beryllium acold worse than the subprime owe fiasco 15 years ago. “This is simply a much unsafe looking infinitesimal successful planetary economics than adjacent the madness of the lodging bubble of 2007,” Grantham opined during the Reuters event. Grantham is simply a good known capitalist and entrepreneur connected Wall Street, arsenic helium started 1 of the archetypal scale funds successful the aboriginal seventies.

In December 2020, GMO managed $65 cardinal successful assets nether absorption (AUM) and successful caller times, Grantham has been a vocal professional of the world’s economical blunders. Grantham besides had a batch to accidental during the 2007-2010 ‘Great Recession,’ successful statements concerning Obama economics and the housing bubble that took spot astatine the time. Speaking to the Reuters Global Markets Forum past week, Grantham said the S&P 500 banal marketplace scale could driblet by 26% successful the adjacent year. During the discussion, helium explained that helium was betting against the Nasdaq Composite and junk bonds arsenic well.

Grantham stressed that pockets of assets with ace precocious valuations, called “superbubbles,” had topped by the extremity of past year. “The deterioration successful fundamentals connected a planetary ground looks perfectly shocking,” Grantham remarked. A twelvemonth from now, Grantham predicts that the S&P 500 could people values of astir 3,000 points, and adjacent beryllium “decently lower.” Reuters reports that ostentation is affecting Americans a large deal, and vacation income successful the U.S. are expected to beryllium overmuch little this year.

Furthermore, planetary reinsurers are blaming inflation and the Ukraine-Russia warfare connected the world’s rising hazard extortion rates. The legendary capitalist Grantham said radical often hide astir calculating inflationary pressures.

“People hide to set the S&P for ostentation … your assets are worthy 9% due to the fact that of ostentation successful the past year,” GMO’s main strategist of assets said. “That makes a marginal carnivore marketplace a reasonably superior carnivore market,” Grantham added. Grantham joins Michael Burry and different Wall Street gurus who judge a banal marketplace clang is coming.

What bash you deliberation astir Grantham’s sentiment and S&P 500 prediction? Let america cognize what you deliberation astir this taxable successful the comments conception below.