Marc Faber, publisher of "The Gloom, Boom & Doom Report," warns that the volatile U.S. stock markets have “reached some kind of tipping point.”
“The markets have moved sideward for essentially the last 12 months and this year, when the crash really happened, we were 2% lower on the S&P year-to-date…we were down 13% for the transportation index, so the internal of the market has been weak,” Faber told Fox Business Network.
He said global markets have realized China’s economic weakness is more dismal than “optimistic” fund managers and strategists expected.
“An economy like China is not like a car where you just drive around the corner,” he said. “The Chinese economy cannot be stimulated meaningfully for the time being—it will take time."
And any negative news out of China will eventually hurt U.S. companies, he explained.
“You look at announcements of Hewlett-Packard, United Technologies, car manufacturers… they have a large exposure to China, and when the Chinese economy slows down, what really drove the growth, namely capital spending in China, and consumption in China slows down, so in July, car sales in China were down 7% year-over-year,” he said.
Meanwhile, U.S. stocks were up more than 1 percent on Wednesday, supported by U.S. data and technology stocks led a rebound from Tuesday's steep losses.
But experts cautioned that the full storm has yet to pass.
"Investors should expect more volatility to come in this market," Mark Luschini, chief investment strategist for Janney Montgomery Scott, told the AP.
"The market needs to work through this correction, and that could take weeks, or maybe months."
In fact, other experts paint a gloomy future for stocks.
the publisher of "The Gartman Letter," told CNBC that he thinks stocks are in “a very real bear market,” having failed to make new highs and demonstrated poor volume and breadth.
He also fears that most people “are not prepared at all for it.”
Gartman called the circumstance “very dismaying” and pronounced himself “very bearish" of stocks. "I'd much rather be bullish. It's much more fun to be a bull in a bull market. In a bear market you have to be more careful."
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