WARNING: Is The Stock Market About To CRASH In 2021? | Kevin O’Leary
The stock market recovery is gaining momentum. Index S&The P 500 is now 75% above its low in March last year. The Nasdaq has more than doubled since its pandemic drawdown. Tesla shares jumped a staggering 900% over this period. In addition, hedge funds still remember the coordinated actions of an army of retail traders from Reddit, which were able to cause a giant rise in GameStop securities, albeit only for a short time..
Although there are good reasons for optimism in a relationship the economy and the fight against the coronavirus pandemic, some fear market euphoria is spiraling out of control, sparking a bubble.
«I really think we are in a bubble just like we were in 2000. But this does not mean that the market will collapse soon.», – Morgan Creek Capital Management CEO told CNN Business Mark Yusko.
Yusko pointed to signs of extreme market speculation, such as a 1625% jump for GameStop in January.
«Stock markets in general are on a slippery slope. Look at the parabolic movements of a number of companies like Tesla», – he noted.
Tesla Stock rose another 2% on Monday after the company announced it would invest $ 1.5 billion in bitcoin and will start accepting cryptocurrency for payment.
Yusko also pointed out that Apple’s annual revenue has barely changed over the past five years.. However, earnings per share of the corporation skyrocketed as the iPhone maker aggressively bought back its shares..
Yusko’s warning about the bubble coincides with the forecasts of other well-known experts.
Last month investor Jeremy Grantham stated that the bull market that began in 2009, «ripened into a full-fledged giant bubble, marked by extreme overestimation, explosive growth in prices, frenzied emission and speculative behavior of investors on the verge of hysteria».
Analysts can’t tell when the bubble will burst roughly. They do not deny that the markets can overheat even more before they finally explode..
Yusko’s assessments have long been bearish. Two years ago, he warned that the stock market is overvalued and tech stocks will soon plummet. However, the index S&The P 500 has since grown by over 40% — even despite the pandemic.
While Yusko and Grantham are sounding the alarm, some large Wall Street companies remain very optimistic about the economy and the stock market.. They point to the persistence of extremely low interest rates, which forced investors to actively buy shares..
Goldman Sachs on Monday raised its GDP forecasts for the second quarter of 2021 and 2022 due to the feeling that the Democrats will accept a significantly larger economic aid package than previously expected.
Meanwhile, Goldman Sachs expects S&P 500 will rise to 4,300 points by the end of the year, which is about 11% of current levels.