“I do think we are in a bubble like we were in 2000,” veteran hedge fund manager Mark Yusko told CNN Business. “That doesn’t mean that tomorrow the market is going to crash.”
“Equity markets broadly are in bubble territory. Look at the parabolic moves by a number of companies like Tesla,” he said.
“That’s just financial engineering,” he said.
Impossible to time
Yusko’s bubble warning echoes ones made in recent weeks by other well-known market players.
Of course, no one can time when a bubble will pop. And overheated markets can get much hotter before finally cooling off.
“The challenge with extreme valuations is they can go on longer than you think,” Yusko said.
Morgan Stanley: Get on board or get out of the way
While Yusko and Grantham are sounding the alarm, some major Wall Street firms remain very optimistic on the economy and the stock market. They point to the persistence of rock-bottom interest rates that have forced investors to bet on stocks.
Goldman Sachs upgraded its forecasts for second-quarter 2021 and 2022 GDP on Monday because of a sense that Democrats will pass a significantly larger relief package than previously anticipated.
Meanwhile, Goldman Sachs expects the S&P 500 to climb to 4,300 by year end, up about 11% from current levels.
Michael Wilson, equity strategist at Morgan Stanley, thinks the stock market’s Reddit-driven scare is already firmly in the rearview mirror.
“It appears that greed once again has the upper hand over fear and the bull market is ready to resume in earnest,” Wilson wrote in a note to clients Sunday.
After suffering its worst week since October, the S&P 500 rapidly regained its losses last week, spiking 4.7%.
Read More: US stocks are in a bubble, and it’s unclear when it will pop, hedge fund