"Stock markets may fall by more than 20% this year," said Blackstone Group president and CEO Tony James.
"If you look at the main market-tracking indicators, you will notice that each one is at historical level and warns of a reversal," James said, adding that the decrease would probably be 10% to 20%, and if we also take into account the algorithmic trading momentum drop of more than 20% is entirely probable.
The current downturn is the result of closing long positions triggered by the Fed's intentions, wage increases in the US, and high yields on bonds. In addition, algorithms operating on stock markets have multiplied the downward movement, opening short positions during the crash.
"However, I am of the opinion that the fundamentals of the global economy remain positive, and investors just need to first cache and second to better levels after the adjustment," said Tony James, adding that gains accumulated in recent months are huge and for this reason "normal and healthy market correction" will be larger.
James said Blackstone has a large exposure to fixed-income instruments, including bank loans and mortgages, which expect more than 6% return for 2018.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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