Steven Cohen, founder and manager of SAC Capital Advisers, told an audience in Las Vegas that stock rally that has been in place since August of last year was set to “pause,” although he believes that stronger growth is due in the second half.
Cohen believes that the United States will see 4 percent growth in 2011, according to a report by MarketWatch. Cohen was speaking at the SkyBridge Alternatives Conference this week.
Meanwhile, CNBC reports that Cohen is "net neutral" on U.S. stocks, citing sources close to the fund manager, and believes that the Fed’s decision to wind down quantitative easing in June could set off a flight out of equities.
Cohen has company. A new Bloomberg poll of investors shows that a third expects to hold more cash over the next six months, and 30 percent will cut their positions in commodities. Forty percent believe oil prices will fall.
|Fed Chair Ben Bernanke
(Getty Images photo)
For many investors, a lot was riding on the notion that the Federal Reserve would continue to pump money into system via its unprecedented quantitative easing program.
The Fed has repeatedly said it will cease the current easing program at the end of June, and that inflation due to high oil and food prices would be a short-term concern.
Now investors seem surer than ever that the second round of easing will end on time, raising questions about how ready the economy might be to walk on its own two feet. The economy slowed to 1.8 percent growth in the first quarter and recent earnings did little to inspire confidence.
Despite warnings from market experts such as Pimco’s Bill Gross and commodities guru Jim Rogers that U.S. bonds are certain to be the next major bubble, investors seeking safety pushed Treasurys higher and yields to 3.16 percent on the 10-year, down from 3.22 percent.
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