Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content

The second wave of a rolling bear market is about to begin, says top forecaster


Recommended Posts

A recent spate of stock drops, exacerbated by signs of a second wave of the coronavirus pandemic, is unsettling to say the least. The market selloff of last spring was brief, but brutal.

Our call of the day is from Yves Lamoureux, the president of macroeconomic research firm Lamoureux & Co., who says the second COVID-19 wave is about to usher in another stock pullback

Lamoureux, who correctly predicted a panic event of 2018, originally forecast a three-part rolling bear market up to 2022. In mid-March, he told this column that a market bottom was near, and it arrived a few days later on March 23 — the S&P 500 SPX, +0.29% has since recovered 44%. That was Part 1.

“So we have a second wave coming, we have very wealthy people taking profits [on stocks] and we see a lot of speculation in the market. I think the market is going to start to go down again,” Lamoureux told MarketWatch recently. This selloff phase will start slow and extend into 2021, he added. Another big bounce will follow that, with a final drop to come perhaps near 2023.

He said one way to get ready is by investing in special purpose acquisition companies (SPACs), or shell companies, which raise money via an initial public offering to buy or merge with another company, usually within two years of listing. He said given shares of such companies are around $10, losses aren’t too severe in a stock market drop.

 

“We’re playing very defensive by buying these SPACs and there’s a very big boom,” said Lamoureux, who recommends GMHI GMHI, -2.56%, or Gores Metropolus — his biggest stockholding.

Last month, automotive technology company Luminar, which works with Volvo VOLV.B, -0.87% and other top auto makers, agreed to go public through a merger with GMHI. That taps into a theme he likes — self-driving cars and trucks.

And that segues into a bigger, long-term call that he said is on few radars — deflation. He sees three drivers for this — robotic and other automated technologies that push workers out of jobs, a big drop in oil prices amid rising demand for greener energies, and a 20-year decline in real-estate prices.

“Eventually we’re out of the pandemic, but we’re facing these three big threats that are as big as the pandemic,” he said. “What do you expect once you get out of this pandemic? This is what is awaiting, and that has major consequences for investments.”

 

https://www.marketwatch.com/story/the-second-wave-of-a-rolling-bear-market-is-about-to-begin-says-top-forecaster-11600945948?siteid=yhoof2&yptr=yahoo

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.



×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.