The US stock market, represented by the benchmark S&P 500, has already fallen 20% in recent weeks due to Trump’s tariffs and the subsequent trade war that has emerged.
Still, billionaire Leon Cooperman isn’t convinced that SPX’s bottom has yet to be reached.
“I don’t forecast the bottom. “I want to see the market bottom by itself,” said the chair and CEO of Omega Family Office in an interview today with CNBC.
Other countries, such as China, have already announced retaliatory duties on American goods. This is also hurting US stocks at the moment.
Copperman does not buy the US stock dip
Cooperman is convinced that Trump’s new duties on both friends and enemies are a “mistake”. This could push the US into a recession by the end of 2025.
In the CNBC interview, he said: “It is very clear to me that President Obama has decided that the best way to bring down inflation and interest rates is to have a recession.”
The billionaire advised investors to remain cautious, and to take advantage of any strength that could materialise soon to sell.
He also confirmed that “I don’t trust the environment” at this time.
Cooperman sees a possibility of further SPX decline
Leon Cooperman does not invest in US stocks during the pullback because he is not convinced that we have reached a bottom.
On CNBC’s Squawk Box, he said that investors should be prepared for more pain, as there is still the possibility of a significant further decline.
The billionaire said that investing in the current macroeconomic climate is a risky proposition. He added, “you have to decide how much of a risk you are willing to take.”
Cooperman’s perspective is different from that of Jim Cramer. Cramer has been recommending stocks to buy as the Trump-driven stock decline continues in recent weeks.
Just a few days ago, a former hedge fund manager advised sticking with domestic companies that have pricing power in the current macro-environment.
Trump’s view of the tariff-driven market decline
From November to February, US stocks celebrated Donald Trump’s return to the White House. He was widely expected to favor pro-business policies.
Bill Ackman, a billionaire investor, says that recent developments in the tariffs arena are pushing the United States toward a self-inflicted economic nuclear winter.
Ackman wrote on Monday that imposing significant and disproportionate tariffs on imported products would “destroy the confidence in our country as a trade partner.”
Despite widespread criticism, President Trump remains resolute in his stance on tariffs. He said, “I do not want anything to go down [stocks], but sometimes medicine is needed to fix something.”
This post, How billionaire Leon Cooperman plays stocks in a volatile market, may be updated as new information becomes available.
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