Tags: blackstone | byron wien | economy | momentum

Blackstone's Byron Wien: Economy Lacks 'Natural Momentum'

Blackstone's Byron Wien: Economy Lacks 'Natural Momentum'
 Zuboff | Dreamstime.com

By    |   Friday, 21 August 2020 01:54 PM

Investment guru Byron Wien recently warned shrewd investors that the U.S. economy needs more stimulus from the government to fully recovery from the economic lockdowns forced by the seemingly endless coronavirus pandemic.

“The economy hasn’t developed any natural momentum on its own” and needs more help from the government, the vice chairman of Blackstone’s Private Wealth Solutions Group told CNBC.

“Until people start flying again and traveling again, we won’t get all the back. And that’s probably a 2022 phenomenon,” Wien said.

Wien also said that while a Joe Biden presidency was not “necessarily going to be bad” for businesses, but that another term for President Donald Trump would be better.

“My view is that earnings projections that are based on the fact that there won’t be any tax changes are probably wrong, and so people that are saying that we’ll be back to 2019 levels of earnings in 2022 I think they’re going to have to revise their forecasts,” Wien said.

“Whether that’ll cause a hit to the market is uncertain at this point, but my own view is the market is pretty fully priced at this time,” he continued.

The 87-year-old former Morgan Stanley strategist who’s put out his annual “surprises” list since 1986 is one of the most widely followed on Wall Street.

In January, he predicted the S&P 500 will climb above 3,500 at some point this year as subdued economic growth prompts the Federal Reserve to cut interest rates.

On Tuesday, the S&P 500 recouped all its losses caused by the coronavirus-driven slump and joined the Nasdaq in scaling new peaks. The S&P 500 was up 3.59 points, or 0.11%, at 3,389.10 late Friday afternoon, Reuters reported.

However, other respected economic voices are much more optimistic about the nation's financial future.

White House economic adviser Larry Kudlow, shaking off concerns about a second wave of COVID-19 infections, proclaimed earlier this week that the U.S. economy is rebounding "very, very strongly," and fresh federal aid will reach unemployed Americans in the next week or two.

Kudlow, speaking to reporters at the White House, defended a reduction in the unemployment supplement to $300 from $600, saying stimulus measures should be reduced slowly as the economy strengthens, Reuters reported.

"I think the economy is on a self-sustaining recovery and it's a V-shaped recovery," he said. "We're seeing terrific numbers."

Asked about concerns that a second wave of coronavirus infections this autumn and winter could derail the recovery, Kudlow said: "The hope is that the decline in cases and fatalities will continue. That's the great hope."

He said the number of infections should continue to decline since more Americans were now using face masks, maintaining social distancing and regularly washing their hands.

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Investment guru Byron Wien recently warned shrewd investors that the U.S. economy needs more stimulus from the government to fully recovery from the economic lockdowns forced by the seemingly endless coronavirus pandemic.
blackstone, byron wien, economy, momentum
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2020-54-21
Friday, 21 August 2020 01:54 PM
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