Paul Tudor Jones talking on the World Financial Discussion board in Davos, Switzerland, January 21, 2020.
Adam Galica | CNBC
Billionaire hedge fund supervisor Paul Tudor Jones mentioned Tuesday that shares are sure to hit new lows even when President Donald Trump tones down his aggressive tariffs on China.
“For me, it is fairly clear. You’ve gotten Trump who’s locked in on tariffs. You’ve gotten the Fed who’s locked in on not slicing charges. That is not good for the inventory market,” Jones mentioned on CNBC’s “Squawk Field.” “We’ll most likely go all the way down to new lows, even when Trump dials again China to 50%.”
The broadly adopted investor’s bearish feedback got here after Trump’s rollout of the best levies on imports in generations shocked the world final month, triggering excessive volatility on Wall Avenue. The S&P 500 suffered a extreme sell-off however has since recouped a lot of the losses, sitting 8% beneath its all-time excessive.
Trump has slapped tariffs of 145% on imported Chinese language items this 12 months, prompting China to impose retaliatory levies of 125%. China mentioned final week it’s evaluating the potential for beginning commerce negotiations with the U.S.
“He’ll dial it again to 50% or 40%, no matter. Even when he does that … it would be the most important tax will increase for the reason that ’60s,” Jones mentioned. “So you may type of take 2%, 3% off development.”
Jones, the founder and chief funding officer of Tudor Funding, believes shares have not discovered a backside as macroeconomic circumstances proceed to deteriorate. The Fed has held its key in a single day lending charge regular since December in a spread between 4.25% and 4.5%. Fed Chair Jerome Powell has mentioned he expects policymakers to “await higher readability” on commerce coverage ramifications earlier than adjusting any additional.
“Except they received actually dovish and actually, actually reduce, you are most likely gonna go to new lows,” Jones mentioned. “After which after we’re new lows, the onerous day will begin to comply with, and it will most likely create the Fed to maneuver, create Trump to maneuver. After which we’ll get some type of actuality.”
Jones shot to fame after he predicted and profited from the 1987 inventory market crash. He’s additionally the chairman of nonprofit Simply Capital, which ranks public U.S. firms based mostly on social and environmental metrics.