Here’s how long it will take for the bull market to return
- Leon Cooperman says start of a new bull market is not on the cards.
- He sees “now” as comparable to the great financial crisis of 2008.
- The S&P 500 index is down more than 20% for the year at present.
The start of a new bull market is not on the cards at least for anytime soon, says Leon Cooperman. He’s the Chairman and CEO of Omega Family Office.
Highlights from Cooperman’s interview on CNBC
Cooperman warns the fiscal and monetary policy in recent years have set us up to linger in the bear market for a while. Speaking with CNBC’s Joe Kernen this morning on “Squawk Box”, he said:
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We’ve borrowed from the future and we’re in the give back period now. It’s like the Pharaoh’s dream of seven lean years following seven fat years. I’m not making a seven-year forecast, but it would be unlikely to go back into a bull market anytime soon.
The S&P 500 index slipped into the bear market territory after a worse-than-expected CPI print for May on Friday.
Buy the dip philosophy to fade moving forward
Cooperman sees “now” as comparable to the great financial crisis and expects “buy the dip” philosophy to increasingly lose traction moving forward. He noted:
We’ve seen extraordinary speculation and I’m confident it’ll leaves some scars. We’ve had aggregate that draw down wealth equal to what happened in 2008. [People are losing money] and it’ll affect their thinking, giving way to get me out philosophy.
The U.S. Fed is scheduled for a policy meeting on Wednesday. Many are convinced the benchmark index down more than 20% for the year is now pricing in a 75 bps increase in interest rates tomorrow.