Billionaire investor Leon Cooperman doesn't think a bull market will come anytime soon and sees only a 5% chance of the S&P 500 rising above 4,400.
“What I said in the last program,” the chairman and founder of family office Omega Advisors told CNBC Wednesday evening, referring to a prior TV appearance, “is equities were the best house in the financial asset neighborhood, but I didn’t like the neighborhood — and I still don’t like the neighborhood."
The hedge funder, referring to Genesis 41, added: “I felt like a Pharaoh, the Pharaoh had a dream, the dream was interpreted by Joseph, and the dream was we’re going to have seven lean years following seven fat years. So I think anybody looking for a new bull market any time soon is looking the wrong way.”
Cooperman, 79, attributed his view to financial markets coming off of a "speculative period" in recent years.
SPACS, cryptocurrencies, options trading, and “crazy valuations of the would-be FAANGs” – all of which have made a sharp reversal in 2022 after a boom the prior year – were the outcome of those “fat years,” according to Cooperman.
This pessimism comes after the worst year for stocks since the Global Financial Crisis in 2008. The S&P 500 tumbled 19.4% in 2022 and the Nasdaq Composite wiped out a third of its value. The Dow fell a comparably modest 9% but still rounded out the end of a three-year winning streak for the major averages.
Four trading days into 2023, the indexes are down on the year.
“I think we’ve spent a lot of time pulling demand forward, and we gotta straighten that out,” he added, pointing to a super tight labor market that has 1.7 job openings for every worker looking, presenting a challenge for corporate profit margins.
Cooperman placed the chances of the S&P 500 staying in a range of 3,600 to 4,400 in 2023 at 50%, the likelihood of the index rising above 4,400 at 5%, and the possibility of levels falling into the low 3,000s range at 45%. The index closed at 3,808.10 on Thursday.
In Cooperman's view, the latter depends on whether the Federal Reserve attempts to achieve its long-term inflation target of 2% rather than settling at 3-4%.
The Consumer Price Index (CPI) rose at an annual clip of 7.1% in November, the latest reading before December’s report drops next week. The Personal Consumption Expenditure (PCE) Price Index rose 5.5% the same month.
Cooperman also emphasized that a lack of confidence in the system because of “foolish policies” is even more of a burden than inflation and the Federal Reserve.
“I would basically take the position that we are in a market of stocks rather than the stock market,” Cooperman said. “I expect very little over the next few years.”
—
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Click here for the latest trending stock tickers of the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Related Quotes
Fewer hours worked plus smaller pay raises mean the Federal Reserve has weakened the labor market and licked inflation.
Retirement Planners of America Senior Retirement Planner Ken Moraif joins Yahoo Finance Live to explain how to prepare for retirement in the next five years amid heightened volatility and economic uncertainty.
No, employer match does not count towards 401(k) limit, however, the IRS does limit total contribution from both the employer and the employee combined.
My investment portfolio took a major hit in 2022, partly due to a broad market downturn and partly because I happen to own a lot of tech stocks, which clearly didn't have a stellar year. The good news is that there's a chance the stock market will recover in 2023.
The S&P 500 had its best week since November. Reports from JPMorgan Chase and Bank of America will be among those that could confirm the rally—or send shares sliding.
Citi's global strategy team looked around the world and decided to cut its recommendation on the U.S. to underweight from overweight.
The company's new inspection facility was slated to bring hundreds of jobs to this West Valley city. Now, it's unlikely the company will build the project as it faces potential bankruptcy.
Investors that stepped in to buy when others were selling have seen huge gains. This is the real lesson from Exxon's huge price advance.
If you want to know who really controls Snowflake Inc. ( NYSE:SNOW ), then you'll have to look at the makeup of its…
The Republican extremist is making moves away from the fringe to become a major party player — but will it work?
Frankenson's Pizzeria in Las Vegas moved from virtually no customers to completely sold out in a matter of hours after a popular TikTok food reviewer gave it a chance. Alyssa Bethencourt reports.
Earn anywhere from $200 to $3,000 in cash for opening a checking or savings account with any of these 10 banks. Just be ready for some hurdles.
Is it time to get ready for a richcession? A Wall Street Journal reporter thinks so. Here's what that could mean for a recession that hits in 2023.
Former U.S. Treasury Secretary Lawrence Summers said that he doesn't think the will return to an era of low interest rates once the spike in inflation is over.
Walgreens is competing with CVS and Walmart to enter the clinical trial space at a time when attention on the industry has spiked amid concerns of a lack of diversity of trial participants.
“She was on her knees with her eyes closed and her palms flat against the stone.”
#Chiefs QB Patrick Mahomes warmed up ahead of Week 18's tilt with the #Raiders in a pullover honoring #Bills S Damar Hamlin.
Harry's memoir reportedly contains reflections on his brother's hair loss.
College students in the U.S. have never had more things to worry about.
Georgia coach Kirby Smart said his father, former high school football coach Sonny Smart, won’t be at the College Football Playoff national title game because of health issues. “It hurts me that he and my mom won’t be here,” Kirby Smart said Saturday, during CFP media day.
