- Billionaire investor Paul Tudor Jones told CNBC the stock market could see a big gain early in 2021 due to the upcoming fiscal stimulus.
- Jones pointed to the stock buying frenzy that took place after the adoption of the first stimulus in the spring. “The Robinhood Nation… went mad and bought stocks,” he said.
- He also discussed how Joe Biden’s tax plan will help Main Street, but could hurt long-term financial assets “a lot”.
Billionaire investor Paul Tudor Jones told CNBC on Thursday that the stock market could see a big gain in early 2021 after the next stimulus is adopted.
“At some point in the first quarter of next year you’re going to have a big upward movement no matter what level that might be, as people are making money out of this first stimulus package and deploy it in a variety of financial assets, ”Jones says.
The founder of Tudor Investment Corp. noted the large number of purchases that have taken place after the passage of the CARES Act stimulus bill last spring.
“The Robinhood Nation… went mad and bought stocks,” Jones said.
He expects the stimulus to pass within the next six to eight weeks and will total around $ 1.7 trillion. But the end of 2020 could be more precarious for stocks, he added.
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“I could easily see a situation where the market sells out at the end of the year and then you have this typical rally from the start of the year, which could accelerate until the end of the first quarter, certainly in the middle of the first quarter, ”he said.
Jones also said that Joe Biden’s capital gains tax plan would hurt long-term financial assets “a lot” if he won the presidency.
“If you go back and look in history, there is an inverse relationship – it’s loose but it’s clearly there – between stock multiples and capital gains tax,” a- he declared.
“I think Biden’s tax plan is actually going to do exactly what it’s designed to do, which is to help Main Street, help the average American,” Jones said. “And it’s going to come at the expense of the 1%, whose wealth is mostly encapsulated in the stock market and financial assets, and it’s going to come at their expense and you’re probably going to have multiple squeeze, and you will probably get a sort of mean reversion. ”
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