In September, the Federal Reserve finally launched its first wave of interest rate cuts in four years, cutting interest rates by 2% in one breath. Coupled with the recent stable economic data in the United States, concerns about economic recession are gradually fading, and China has unexpectedly launched large-scale stimulus measures. Global stock markets have generally been bullish recently. U.S. stocks have hit record highs several times after cutting interest rates.
At the same time, the cryptocurrency market has also recovered significantly. Bitcoin successfully exceeded Altcoin$65,000 last night and continued to approach the downward trend line that has not been broken in half a year. At the US$2,700 per ounce mark, it has increased by more than US$600 this year, the largest annual increase in history.
Extended reading: Bitcoin breaks through $65,000, where to go next? U.S. GDP growth exceeds expectations, initial jobless claims decline
Is a global market flash crash coming?
However, Mark Spitznagel, founder of the well-known black swan fund Universa, said in an exclusive interview with Bloomberg on Thursday that as the stock market hits a record high, traders are increasingly confident about a soft landing of the economy, but investors should remain vigilant about secondary effects.
Mark Spitznagel pointed out that even if the Federal Reserve cuts interest rates, an economic slowdown may cause a sudden market collapse. He predicts that global markets will collapse before the end of this year, which may be caused by an economic slowdown:
When the yield curve inverts and then inverts again, the bell starts ringing, and that's when you enter black swan territory. Black swans are always lurking, but now we are in their territory.
Driven by the resilience of corporate profits, the Fed's interest rate cut cycle and expectations that the U.S. economy will avoid recession, the S&P 500 has hit 42 record highs in 2024, but Mark Spitznagel warned that the Fed's lower borrowing costs should Investors are worried, and they should think more about what the stock price will do next year.
Looking at the future direction of the market, Mark Spitznagel predicts that gold will fall, cryptocurrencies will fall along with risk assets, bonds may be a safe haven, and volatility will increase in the coming months.
Warned U.S. stocks will halve after rate cut
In fact, Mark Spitznagel warned in July this year that the U.S. stock market is already in the "biggest bubble in human history" and will usher in the final carnival. Once the Federal Reserve cuts interest rates, the market trend may reverse and a lot of selling pressure will follow. By then, most of the U.S. stock market value will have evaporated.
Mark Spitznagel was the former chief trader under Nassim Nicholas Taleb, author of "The Black Swan Effect". Since founding Universa in 2008, he has accomplished some amazing achievements, including making $1 billion in one day.
Mark Spitznagel's trading strategy usually loses money almost every day, because he uses complex strategies that can only make disaster fortunes during periods of severe volatility, such as the 2008 financial tsunami, the 2015 flash crash, and the 2020 new coronavirus epidemic causing the stock market crash. This is enough. Let his trading performance beat the traditional investment portfolio of six stocks and four bonds.
