Markets are far from bottoming out, expert warns

During an interview on “Varney & Co.” On Friday, Eddie Ghabour, co-owner of Key Advisors Group LLC, warned that the markets are not “near” a bottom and said investors should take the threat of a recession “seriously” as inflation hits a new high in 40 years. reaches.

EDDIE GHABOUR: The Fed will have to force a recession to lower inflation† We warned about this. That is why we are not fully invested throughout the year. Investors should take this seriously. Trying to find a bottom in this kind of environment is dangerous, and I don’t think we’re near a bottom. So they should take advantage of these opportunities to protect their hard-earned capital before things get much worse.

Markets plunged Friday in response to the May CPI report. (iStock/iStock)

When you think about all that money that has gone into the system over the past two years, it has created one of the biggest bubbles of our lives in my opinion. Now they have to settle the balance which means these bubbles will pop one by one. And it’s already happening. It happened first in crypto. It’s down 50%. NASDAQ fell more than 30 from its high. And you’ll see the bigger caps do that. This market needs to be reset to where it was before we can move forward. So that means we need to be at least 30% lower in the S&P in my opinion before we can even think of getting close to a bottom. And finally, the VIX has been so tame, you don’t have a market bottom when you have that much complacency. The VIX goes to 40. We’re going down at least 30 plus percent in my opinion. And investors need to protect their capital.

INFLATION WAS FRESHLY STORED IN MAY IN 40 YEARS WITH CONSUMER PRICES INCREASING 8.6%

WATCH THE FULL INTERVIEW HERE:

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