Is the big shot "bearish"? "Stock god" aggressively cuts heavy positions, "bond king" warns against bottom fishing
Big shots "bearish"? "Stock God" heavily cuts core stocks, "Bond King" warns against bottom fishing. The US stock market is feeling the chill due to weak data and pessimism from big shots. Buffett and Bond King Bill Gross have expressed pessimism towards the US stock market, believing that there are few bull stocks and investors should sell instead of bottom fishing. Buffett is selling stocks in a big way, possibly out of concern for a recession. Meanwhile, Bond King Gross stated that unless AI companies can improve US productivity, value stocks will outperform growth stocks. Wall Street analysts still maintain an optimistic stance on the market
Soft data and bearish sentiment from major players are casting a chill over the US stock market.
As non-farm data dragged down the US stocks significantly, not only did Buffett send out a pessimistic signal to the market, but "Bond King" Bill Gross also expressed a less optimistic attitude towards the US stocks.
On Friday morning local time, Gross stated on X platform:
"Currently, there are few bull stocks in MLPs (Master Limited Partnerships), bank stocks, and financial stocks."
"Investors should no longer talk about bottom fishing, but focus on selling."
Earlier, the latest quarterly report revealed that by the end of the second quarter, Berkshire Hathaway's Apple holdings had decreased from about 789 million shares in the first quarter to approximately 400 million shares, a decrease of nearly 50%; since July, Berkshire Hathaway has also sold about 90 million shares of Bank of America, cashing out a total of about $3.8 billion.
Some opinions point out that considering the extent of Buffett's selling, and the fact that Berkshire Hathaway only repurchased $345 million of its own stock this quarter, it indicates that this billionaire believes the entire market is too expensive.
Buffett's indicator of whether the market is overheated (the ratio of total market value to GDP) has now surged above 180%, indicating that the market is severely overvalued.
CFRA Research analyst Cathy Seifert commented that Buffett's massive selling may be due to recession concerns, describing Berkshire Hathaway as a company "preparing for a soft economic environment."
Edward Jones analyst Jim Shanahan bluntly stated that Buffett's actions are "a sell signal":
"The level of selling trades is much higher than we expected."
In an interview at the end of July, Gross stated that unless AI companies can increase US productivity from the historical level of 1-2% over the past few decades to 2-3%, value stocks will outperform growth stocks in the long run due to their lower initial valuations and higher dividend returns.
However, some Wall Street analysts remain optimistic.
Jay Hatfield, CEO of Infrastructure Capital Advisors, stated in a report on Friday that the non-farm employment report confirms that the economy is slowing down but does not indicate that the US is entering a recession He reiterated the S&P annual target price of 6000 points set earlier, which still has a 12% upside potential compared to Friday's closing price. Hatfield expects a rebound in the US stock market by the end of the year as the election results become clearer