Tags: Coronavirus | Financial Markets | gary shilling | stocks | recovery | great depression | market drop

Gary Shilling: Market Could Plunge 40% Over the Next Year

tv screen displays "stocks plunge" headline as traders work on computers in the nyse
Traders work on the floor during the opening bell on the New York Stock Exchange on March 9, 2020 in New York. (Timothy A. Clary/Getty Images)

By    |   Wednesday, 08 July 2020 08:15 AM

Financial analyst Gary Shilling said stocks could be hit with a big decline — similar to the market’s drop during the Great Depression.

Shilling made his remarks in a CNBC interview on Monday. He estimated the market could plunge between 30% to 40% over the next year as the economic recovery from the coronavirus recession takes longer than expected.

"I think you’ve got a second leg down and that’s very much reminiscent of what happened in the 1930s where people appreciate the depth of this recession and the disruption and how long it’s going to take to recover," he said. "And that’s why I think stocks could decline from here another 30 or 40% and that may be optimistic."

CNBC noted the S&P 500 dropped in February and early March as the pandemic began to spread throughout the U.S. The index has rebounded roughly 40% since mid-March, sparked by optimism about the gradual reopening of the economy and lawmakers’ economic stimulus.

However, as the number of coronavirus cases in the U.S. continues to rise, some investors are still cautious, according to CNBC.

And Shilling said the pandemic will force consumers to remain cautious about spending.

"I think we’re going to see downward pressure on prices and that works to the advantage of Treasury bonds, which have been my favorite since 1981," he said.

Shilling had warned in April that people should not be fooled by the rebound in stocks. And he had said the investment scene was beginning to resemble the 1929 market crash and the early 1930s Great Depression.

© 2020 Newsmax. All rights reserved.


   
1Like our page
2Share
StreetTalk
Financial analyst Gary Shilling said stocks could be hit with a big decline - similar to the market's drop during the Great Depression. Shilling made his remarks in a CNBC interview on Monday. He estimated the market could plunge between 30% to 40% over the next year as the...
gary shilling, stocks, recovery, great depression, market drop
260
2020-15-08
Wednesday, 08 July 2020 08:15 AM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved