Mainstream market forecasters are taking a serious look at the bitcoin boom — noting a bust could cause collateral damage in the stock market.
"It's sort of been until recently pretty isolated. We can't have a conversation without bitcoin showing up.Somebody will get scared if bitcoin drops by 30 percent in a short period of time." said Bob Doll from Nuveen Asset Management.
He believes the longer the bitcoin mania goes, and the bigger it gets — the worse it is for the stock market.
Right now, Doll's annual forecast calls for more gains. He has a year-end price target of 2,800 on the S&P 500. That's about 5 percent higher from current levels.
His biggest economic-related risk to the rally is inflation. Doll says he isn't seeing hints of it yet but is conscious of the negative role it will eventually play.
"A little bit of inflation is good for the revenue line. When it becomes evident that the Fed has to sit on it by becoming punitive and raising rates faster than the curve suggests, that's when we worry," said Doll. "That's when we tend to get the inverted yield curve. They are in our future."
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
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