Finance

Jim Chanos: Bear market is doing something unheard of in my career

Products You May Like

In this article

Famed short seller Jim Chanos sees an alarming trend in the market.

“I’ve been on the Street [since] 1980 [and] not one bear market has ever traded above nine times to 14 times the previous peak earnings,” the Chanos & Co. founder told CNBC’s “Fast Money” on Monday.

His latest warning comes in the midst of earnings season, two days before the Federal Reserve decision on interest rates and four days before the key January employment report. According to Chanos, the market will not be able to overcome rising rates and falling corporate profitability.

“Things are not cheap,” said Chanos, who acknowledges stocks are still cheaper than 18 months ago. “But people are pricing in a pretty nice Goldilocks scenario.”

So far this year, the S&P 500 is up almost 5%, with media, technology and airlines leading the gains. On Tuesday, the index fell 1.3% to close at 4,017.77.

Chanos notes the market is anticipating corporate profits rising 12% this year, 2% inflation and a Fed rate cut within the next six to seven months.

“That’s pretty much nirvana if you’re a bull,” he said.

Chanos, who said he doesn’t try to time the market, doubts the bullish scenario will unfold.

“If you think earnings are peaking now at $200, that’s a long way down,” Chanos said. “That’s 1,800 to 2,800 [on the S&P 500]. We are not anywhere near that.”

Disclaimer

Products You May Like

Articles You May Like

Here’s how climate change is reshaping home insurance costs in California — and the rest of the U.S.
The Federal Reserve is likely to hold interest rates steady next week. Here’s what that means for your money
Here’s what CEOs are saying about DEI at Davos
Will Your Taxes Go Up? Best- and Worst-case Scenarios for Tax Reform in 2025
BlackRock’s Fink sees potential risks and says the bond market will tell us where we are going

Leave a Reply

Your email address will not be published. Required fields are marked *