Hedge fund titan David Tepper said the Federal Reserve is sending the market a message and it’s not a good one.
He made the following points in an email to Joe Kernen:
“1. Powell basically told you the Fed put is dead.
2. Everyone is tight. Chinese money growth plummeting. ECB cutting the last of QE. And Fed still in tightening mode.
3. The net biggest issuance of Treasuries and worldwide fixed income is coming next year. Something is going to get crowded out. Bonds stocks etc.
4. Oh and there is this trade war question. I think we should be having a fight with China on different issues. But it is not conducive to confidence. Freezing some worldwide activity.
5. Cash is not so bad. ”
“The Fed doesn’t care about the stock market within 400 SPX (S&P 500) points,” Tepper added in the email. “It’s the real economy stupid.”
Tepper is the founder of Appaloosa Management and his calls have moved the whole market in the past. The hedge fund investor predicted in Sept. 2010 that the stock market would surge as the Fed sought to inject the market with more liquidity. The S&P 500 is up 164 percent since that call.
Source: CNBC
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