Marc Faber warns that U.S. stocks are “very vulnerable” to a wide variety ever-growing global risks and threats.
"I think stocks are still very vulnerable," the Gloom, Boom & Doom Report publisher told
CNBC. He said a sagging global economy, sluggish earnings and the U.S. presidential election all endanger the market.
"I think the market is fully valued," he said, explaining that factors such as a deteriorating global economy paired with high costs of living won't translate well for stocks.
“The average American doesn't have much money left after paying for Obamacare and for rising rents, and rising food prices and so forth and so on. And so the global economy is not doing well, and the earnings will be still under pressure. What is interesting if you look at the bond market, the bond market has been holding up reasonably steady, and since January indicating that the bond market doesn't believe in a very strong economy.
Faber added that U.S. Treasury bonds look "very attractive" compared with global bonds.
He said central banks in the U.S., Europe and Japan have "manipulated" stocks. He added they may not sustain their current levels with slow economic growth in the U.S. and around the world.
Faber said the leading U.S. presidential candidates, former Secretary of State Hillary Clinton and businessman Donald Trump, add more uncertainty to markets.
Faber isn't alone in his dire view of the economy.
Lawrence Summers, former Treasury secretary and onetime economic adviser to President Barack Obama, warns that the economy is full of warning signs despite relative market stability after some recent volatility.
"I think it is a mistake to be too satisfied with where we have been. If we look at the period from 1929 to 1940 and what happened to G.D.P. [gross domestic product] per adult American and we look at the period from 2008 to 2019 as best we can judge it, it is equivalent," he told the
New York Times. "The odds are better than 50-50 that we will have a recession within the next few years."
Other prominent financial experts aren't so pessimistic.
Newsmax Finance Insider Ed Yardeni, who has been ranked among Wall Street's best economic forecasters, predicts stocks will be 10 percent higher by this time next year.
"Is there a recession around the corner? I don't see it," Yardeni, the president of independent firm Yardeni Research, told
CNBC recently. Even as speculation abounds over the Federal Reserve's timing on tightening monetary policy, the market bull believes the trend is still up.
"The bottom line here is even if the Fed [hikes] in June, we are still talking about historically low interest rates," he told CNBC. "I do think that the dollar will continue to strengthen, and I do think some of the panic and concerns about the commodity markets were overdone at the beginning of the year."
(Newsmax wire services contributed to this report).
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