Tags: byron wien | bullish | stocks | deficit

Byron Wien Sees 'Terrific Buying Opportunity' for Stocks

(Dreamstime/Kenneth Mellott)

By    |   Thursday, 12 April 2018 01:39 PM

Economic guru Byron Wien tells investors that he sees a “terrific buying opportunity' for stocks and that the volatile market won’t drastically plunge this year.

However, he warns that the ballooning US federal deficit could spell trouble down the road.

"If I'm right and we test the lows, that's going to be a terrific buying opportunity," Wien, vice chairman at Blackstone and a 50-year veteran of Wall Street, told CNBC.

The vice chairman of Blackstone's private wealth solutions group predicted stocks won't enter “bear market” territory in 2018.

A bear market typically is commonly defined as a drop of 20 percent or more from a market's peak.

Wien is still remains bullish for the rest of this year despite "too much complacency" in the market.

"I think the year's going to be good. I agree ... that we're going to have 3 percent growth pretty much for the year, earnings are going to be good, interest rates are going up and not too much, inflation is going to stay tame," he said.

He also doesn’t expect any political risks to transform into actual market threats or dangers. "I think that the market assumes that everything that could go bad won't," including NAFTA renegotiations, a China trade war and a possible meeting between Trump and North Korean leader Kim Jong Un.

Wien did caution investors to keep a sharp eye on the federal deficit, which he sees soaring to “$200 to $300 billion" this year.

The U.S. budget deficit will balloon over the next few years mainly because of deep tax cuts approved in December by congressional Republicans and President Donald Trump, the nonpartisan Congressional Budget Office said on Monday.

The deficit - the amount that Washington's spending exceeds its revenues - will grow to $804 billion in fiscal 2018, which ends on Sept. 30, up from $665 billion in fiscal 2017, the CBO said, despite expectations of stronger near-term economic growth than the agency previously forecast, Reuters explained.

The CBO forecast that deficits will "increase rapidly this year and over the next few years," then stabilize, resulting in a projected cumulative deficit of $11.7 trillion for 2018-2027.

Tax cuts and a recent $1.3 trillion federal spending package are expected to drive economic growth, adding to momentum in discretionary spending by businesses and households over the next two years, the CBO said.

The CBO forecast 3.3 percent growth in 2018 in real gross domestic product, a broad measure of the economy, and 2.4 percent GDP growth in 2019, higher estimates than the CBO forecast last year.

Wall Street stocks bounced higher on Thursday as expectations that lower U.S. taxes would fuel corporate earnings added to easing of nerves over U.S. military conflict with Russia in Syria.

“We’re seeing some early optimism ahead of earnings and there’s no bad news for the moment, be it back and forth between Russia and the U.S. or trade war situation,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville.

“This is first full quarter with new taxes... that is a variable that could work very positively in the favor of investors,” he told Reuters.

(Newsmax wire services contributed to this report).

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Economic guru Byron Wien tells investors that he sees a “terrific buying opportunity' for stocks and that the volatile market won’t drastically plunge this year.
byron wien, bullish, stocks, deficit
Thursday, 12 April 2018 01:39 PM
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