For months Marc Faber, publisher of the Gloom, Boom & Doom Report, has predicted that stocks will plunge.
But now he's changed his tune, at least slightly.
Faber tells CNBC that stocks already have begun to bounce back from a "fully oversold" position.
"We had a significant correction in many shares. And as of Thursday night's close, the markets on a very short-term basis were extremely oversold, with only 20 percent of shares above their 50-day moving average," he notes.
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The S&P 500 closed Thursday at 1,909.57, down 4.1 percent from its July 24 record high. The index stood at 1940.27 Monday morning.
"Now a rebound is underway in my opinion," Faber argues. But he warns against expectations of an explosive rally. "I doubt we will make new highs. And if we make new highs, it may be just with a very limited number of shares, because the technical damage is quite significant."
For the long term, returns will be limited because valuations for stocks, bonds and real estate are "inflated," he explains.
"I think the returns will be disappointing."
While the markets haven't reacted much to new developments in Iraq, that could change, Faber states. "If ISIS makes a move on Saudi Arabia, then markets will react slowly."
Meanwhile, individual investors appear to be growing worried about the stock market.
An
American Association of Individual Investors survey of its members for the week ended Aug. 6 shows that 38.2 percent of them have a bearish view of the stock market for the next six months. That's the highest level since last Aug. 22 and is up from 31.1 percent a week ago.
A total of 30.9 percent of investors are bullish.
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