The stock market may get cut in half, but this ‘most undervalued’ asset is about to surge, billionaire investor says

Paul Singer, the hedge-fund billionaire behind Elliott Management, warned last month that the ultimate path of global stock markets is a drop of at least 50% from February highs.

What’s an investor to do in the face of such a grim outlook? Load up on gold, perhaps. After all, according to a report this week from the Financial Times, that’s what the smart money’s doing.

Gold, advised Singer, is “one of the most undervalued” assets available and it’s worth “multiples of its current price” due to the “fanatical debasement of money by all of the world’s central banks.” His fund gained about 2%, the FT reported, thanks primarily to profits from its gold position.

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This year is lining up exactly like the 2000 dot-com bubble crash — stocks will drop 40% from here, former Goldman manager says

This year is shaping up exactly like the 2000 dot-com bubble crash and stocks will drop a further 40%, a former Goldman Sachs manager has warned.

April produced the best monthly gains for the Dow Jones Industrial Average DJIA, -1.58% and S&P 500 SPX, -1.04% in 82 years — after the worst first quarter in history — and May has so far got off to a bad start.

Former Goldman Sachs analyst Will Meade said the rest of the year looked even worse for stocks, predicting a 40% drop over the rest of 2020.

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The stock market may get cut in half, but this ‘most undervalued’ asset is about to surge, billionaire investor says

Paul Singer, the hedge-fund billionaire behind Elliott Management, warned last month that the ultimate path of global stock markets is a drop of at least 50% from February highs.

What’s an investor to do in the face of such a grim outlook? Load up on gold, perhaps. After all, according to a report this week from the Financial Times, that’s what the smart money’s doing.

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The US will need to spend trillions more as economy takes until 2022 to fully recover: CNBC survey

  • A third of respondents in the CNBC Fed survey believe the economy won’t be fully restored until the second quarter of 2022, but there are a wide range of views about the recovery.
  • More money will be needed from the Federal Reserve and Congress to combat the pandemic slowdown.
  • GDP will decline by 24% this quarter, respondents to the survey predicted. The unemployment rate will rise as high as 19% and remain elevated through next year, they said.
  • Other highlights: Rates will remain at zero the rest of year, stocks will finish lower from here and there is a strong chance of a second contagion.

The economy could take one to two years to rebound to full strength and the Federal Reserve and Congress, having already committed historic sums to fight the coronavirus pandemic, will have to commit trillions more, according to respondents to the CNBC Fed Survey.

With the Federal Reserve’s balance sheet already at an unprecedented $6.45 trillion, the 36 respondents see it rising on average to $9.8 trillion. The additional trillions will be added by the end of the current quarter, the respondents expect. Congress, having already committed about $2.5 trillion, is seen putting in an additional $2 trillion.

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Gold prices will nearly double to a record $3,000 as central banks fuel ‘financial repression,’ Bank of America says

  • Gold will rally 80% over the next 18 months as central-bank stimulus and economic turmoil drive record interest, Bank of America analysts forecast in a Monday note.
  • Monetary authorities are spending trillions of dollars to keep economies above water. The widespread spending will place incredible pressure on currencies, pushing investors to gold and its scarcity, the bank’s analysts said.
  • There’s still plenty of room for investors to pile into the metal, the bank added. Positioning “has been surprisingly weak” even after gold’s rally in late March, and a massive influx of capital will send prices soaring through the year.

Central banks’ stimulus frenzy amid the coronavirus pandemic will drive gold to a lofty record by October 2021, Bank of America analysts projected in a note on Monday.

 

 

 

 

 

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IMF says the world will ‘very likely’ experience worst recession since the 1930s

  • The Washington-based organization expects the global economy to contract by 3% in 2020.
  • The Fund expects a “partial recovery” in 2021, but this is conditional on an improvement in the health crisis.

The global economy will this year likely suffer the worst financial crisis since the Great Depression, the International Monetary Fund said Tuesday, as governments worldwide grapple with the Covid-19 pandemic.

The Washington-based organization now expects the global economy to contract by 3% in 2020. By contrast, in January it had forecast a global GDP (gross domestic product) expansion of 3.3% for this year.

“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” Gita Gopinath, the IMF’s chief economist, said in the latest World Economic Outlook report.
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