Paul Tudor Jones warns of a 12% downside in S&P 500

Paul Tudor Jones – the billionaire hedge fund manager says the possibility of a sharp pullback in the S&P 500 index remains on the table.

Paul Tudor Jones sees a recession ahead

On CNBC’s “Squawk Box”, the Founder of Tudor Investment said the U.S. economy will slide into a recession in the first quarter of 2024 because:

The bond market, simply though supply and demand, is going to deliver more rate hikes because we don’t have a clearing price yet for long-term debt.

The U.S. Federal Reserve has already signalled that interest rates will likely remain higher for longer. An inverted yield curve and gold prices, he added, were telltale signs that we are headed into a recession.

GOLD TECHNICAL CHART
*Gold price keeps declining to reach the thresholds of the waited extended target at 1809.35, expecting the continuation of the bearish bias to surpass this level and achieve additional negative targets that extend to 1765.20 areas.* pic.twitter.com/h9eETrV8dW

— AJDaniel (@AJ_Daniel6) October 3, 2023

S&P 500 is up 14% versus the start of this year at writing.

Israel-Palestine war could weigh on stocks

Other reasons that Paul Tudor Jones cited for his bearish view include the deteriorating fiscal health of the United States. Debt-to-GDP is currently at 122% – the weakest that U.S. has seen since the World War II.

The billionaire hedge fund manager expects the Israel-Palestine war to create a risk-off market environment. Militant group Hamas attacked the city of Ashkelon, Israel on Tuesday.

Paul Tudor Jones recommended waiting for a resolution before dipping a toe in risk assets again. He even said that a nuclear war wasn’t entirely off the cards either.

All in all, the Founder of Tudor Investment Corporation warned of a 12% downside in the S&P 500 on Tuesday. Paul Tudor Jones remains bullish on Bitcoin, though.

Paul Tudor Jones: "You Could Get A World War Cascade Where Everyone Gets Involved… It's Hard To Like Stocks, I Like Bitcoin And Gold" https://t.co/1CECxtL6pD

— zerohedge (@zerohedge) October 10, 2023

What is Paul Tudor Jones known for?

Paul Tudor Jones is known for founding Tudor Investment Corporation and Robin Hood Foundation. He predicted the largely unexpected stock market crash on October 19^th, 1987 – known broadly as the Black Monday.

How did Paul Tudor Jones make his money?

Paul Tudor Jones made his money as a hedge fund manager. Tudor Investment – an asset management firm he founded in 1980 now manages assets worth about $13 billion. He is known for making bets on interest rates and currencies. Jones made $100 million profit on Black Monday.