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PTJ: "Stock market has the ability to go a lot higher"

Summary:

  • Legendary hedge fund manager Paul Tudor Jones comments on the markets
  • Stock market could go "crazy" to the upside later this year
  • US500 remains near 3-month peak; JAP225 retesting key swing level at 23030

With the US cash session now underway there’s been a fairly mixed start for US stock markets. The US500 reacted positively to the earlier data release and remains close to a 3-month high heading into some major events in the next 48 hours.

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 The US500 has gained in 6 of the last 7 sessions and is higher once more today. Price is back near the highs of 2804 seen from March. Source: xStation

Some comments from hedge fund manager Paul Tudor Jones are making the headlines this afternoon, with the Billionaire investor speaking on CNBC. PTJ first admitted that he was "light" in his positions at the moment as he felt that the market could be set to go into a summer lull, however he predicts the second half of the year will provide some fireworks. During an interview on CNBC Jones said "I think the stock market also has the ability to go a lot higher at the end of the year. ... I can see things getting crazy particularly at year-end after the midterm elections ... to the upside."

Despite this move he believes the rally will not be sustainable and higher interest rates will lead to an eventual recession. "I think we’ll see rates move significantly higher beginning some time late third quarter, early fourth quarter,". Jones compared the period to 1987 and 1999 in the US and 1989 in Japan. While he is famed with calling the 1987 crash, he doesn’t believe there will be a similar crash coming this time around. 

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 While the Fed and ECB meetings are attracting the Lions share of the attention there is also a BoJ meeting this week (Thursday night/Friday morning). The JAP225 is back near a pretty major swing level at 23030. Source: xStation 

I think this is going to end with a lot higher prices and forcing the Fed to shut it off," he said. "When you look at the stock market relative to GDP, we’re at levels that historically in some other countries led to a blow-off [rally] and then some type of economic contraction. ... It’s an old story, we’ll probably play it again."

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