Jeremy Grantham says the S&P 500 will fall at least 40% from its peak as the stock market bubble looks a lot like 2000 all over again
https://www.yahoo.co...-193206808.html
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Jeremy Grantham is sticking with his call that the stock market is in a bubble akin to 2000.
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Grantham said he expects the S&P 500 to fall at least 40% from its peak in a CNBC interview.
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"We should be in some sort of recession pretty quickly," Grantham said.
Jeremy Grantham of GMO believes the stock market is in a bubble akin to 2000 that is in the process of deflating, according to a Wednesday interview with CNBC.
Grantham said he expects the S&P 500 to fall at least 40% from its peak in what will likely be a multi-year decline for stocks. That would send the S&P 500 to about 2,880, a level not seen since the March 2020 COVID-19 bear market. The S&P 500 is currently down 18% year-to-date, trading at the 3,925 level as of Wednesday afternoon.
On the surface, the current stock market looks similar to the 2000 dot-com bubble given that much of the damage has been concentrated in US tech stocks.
"This bubble superficially looks very much like 2000, focused on US tech, led by Nasdaq going to incredible highs, with the opening weakness in Nasdaq, which started to fall along with the Russell 2000 long before the S&P [500] did," Grantham said.
But there are a couple of serious differences between the 2000 dot-com bubble and today's stock market that scare Grantham.
"What I fear is that there are a couple of differences with 2000 that are more serious. One of them is that 2000 was exclusively in US stocks, the bonds were great, the yields were terrific, housing was cheap [and] commodities were well behaved," Grantham said, adding that in comparison to today, 2000 "was paradise."
