Wall Street veteran Peter Kraus said investors should not be caught off guard by a market correction because some stocks have been pushed into bubble territory and many catalysts for expansion have already been taken into account.
“You have to pay attention to these bubbles, and the market could easily have a 10% to 15% consolidation and no one should be surprised,” said the founder of Aperture Investors on Friday in an interview with Bloomberg Television. Although many investors believe that US President Joe Biden will force a big aid package, “much of the stimulus is already in the price”
Kraus joins those who raise a bubble alarm after retail investors raised stocks like GameStop Corp. and AMC Entertainment Holdings Inc., creating volatility between various stocks. Former co-director of the asset management arm of Goldman Sachs Group Inc. and CEO of AllianceBernstein Holding LP, Kraus formed his new company more than two years ago, and his comments came when the stock reached new highs. He too renewed an inflation warning.
“The amount of stimulus that the United States government will actually put into the economy is likely to be $ 5 trillion. The Fed’s balance sheet has doubled, ”he said. “This cannot happen without affecting inflation. And with rising inflation, real rates can turn positive, and this will have an impact on stocks that are overvalued. “
– With the help of Guy Johnson and Kailey Leinz