Should the market be much lower than it is?

7.27.23 - Should the market be much lower than it is?

Gold last traded at $1,946 an ounce. Silver at $24.15 an ounce.

Stocks will tumble, recession will strike, and dollar dominance is at risk, Thomas Peterffy warns -Yahoo! Finance

Prepare for stocks to plunge, a recession to hit, and the US dollar to falter, Thomas Peterffy has warned.

The billionaire founder of Interactive Brokers also said his bitcoin bet could be worth a fortune or zilch, China has become less of a threat, and many investors are sitting on massive Big Tech profits.

"I think the market should be much lower than where it is," Peterffy told MarketWatch on Tuesday. "I do think that it's going to go down pretty soon."

The chairman of the online discount brokerage argued investors are too positive about the economic backdrop. He cast doubt on predictions that inflation will keep falling and corporate earnings will rise, noting that unemployment usually needs to rise for price growth to slow - and more joblessness weakens demand and erodes company profits.

Inflation jumped as high as 9.1% last year, spurring the Federal Reserve to raise interest rates from almost zero to over 5% in under 18 months. Steeper borrowing costs deter spending, hiring, and investing, which relieves upward pressure on prices. However, they also tend to increase unemployment, drag down asset prices and corporate profits, and raise the risk of a recession.