Billionaire hedge fund manager Paul Tudor Jones said he believes there is huge demand for US stocks this year, mainly from two sources that could propel the market through the toughest economic environment in 40 years. “They probably have close to a trillion dollars of excess demand in US stocks,” Jones said on CNBC’s “Squawk Box” on Tuesday. “Where will the sales go to offset the repurchase claims, the corporate positions, a combination of buybacks and mergers and acquisitions? That’s a significant amount. All things being equal, the stock market would have been up 7% or 8% this year, all things being equal.” The S&P 500 just had its worst year since 2008, shedding nearly 20% and breaking a three-year winning streak. The Federal Reserve Tudor Investment’s founder and chief investment officer has said he believes the Fed is on the verge of raising interest rates to their highest level in 15 years, signaling more rate hikes may be on the way to bring rising inflation under control In a more negative scenario, Jones envisioned the Fed raising rates to a point where it would cause enough economic contraction to lure retail investors to sell some of the stocks at record levels sell off the stocks they bought in 2020 and 2021. “It will take something negative to happen for the stock market to take a meaningful turn bring,” Jones said. “Inflation would have to be too high, right [Fed Chairman Jerome Powell] have to tighten too much to create something, a big economic contraction, to crash the market. Otherwise, the stock market will remain strong.” Jones said he’s not making a specific decision and he doesn’t have a crystal ball on the market outlook, as a lot depends on how inflation plays out.
https://www.cnbc.com/2023/01/10/how-paul-tudor-jones-is-looking-at-the-stock-market-this-year-and-the-chances-for-a-comeback.html Paul Tudor Jones on the 2023 stock market and the chances of a comeback