David Tepper, founder of Appaloosa Management, a well-known hedge fund and legendary investor in US stocks, said on Monday (8th) that he sees the sell-off of US stocks and US debt is likely to be coming to an end.
David Tepper, known as the king of Wall Street hunters, said that it is difficult to bearish stocks now. The main market risk has been removed. In the next few months, the trend of U.S. Treasury yields should be more stable, and investors will be safer to buy stocks now. .
In the past few weeks, due to rising inflation expectations, the market also expects that the US government will launch more stimulus policies, which will drive the yield of US Treasury bonds to rise rapidly, which puts pressure on risky assets. The U.S. 10-year Treasury bond yield climbed from 1.09% at the end of January to over 1.60% on Monday.
The rapid rise in U.S. Treasury yields has dealt a more serious blow to technology stocks, because these technology companies rely on easy low-interest loans to promote high growth in their operations. In addition, the steep trend in the yield of the U.S. 10-year Treasury bond has made investors feel uneasy, and this has also caused corrections to highly valued stocks.
Mike Wilson, Morgan Stanley’s chief equity strategist in the United States, alleged that US Treasury yields are at this price level, making US stock valuations have been in a state of tension, especially for those highly valued stocks.
Tepper believes that Japan, which has been a net seller of U.S. Treasury bonds for many years, should start buying U.S. Treasury bonds again after the U.S. Treasury yield has soared, and this potential purchasing power may help stabilize the bond market.
Tepper also mentioned that the catalyst for bullish stocks in the short term is the 1.9 trillion bailout just approved by the US Senate. He believes that the House of Representatives is also expected to pass the Senate version later this week. It is estimated that US President Biden will sign the relief case into law before the expiration of the additional federal unemployment benefits on March 14.
He also said that after the recent sharp correction of technology stocks, like Amazon (AMZN-US) Such leading stocks are beginning to become attractive. In the past month, the share price of the e-commerce giant has fallen 9.7%, while Apple’s share price has fallen more than 11% during the same period.