March 2, 2024

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Investors seriously ignore the impact of the bear market on earnings

Investors seriously ignore the impact of the bear market on earnings

Noted short seller Jim Chanos sees a worrying trend in the market.

“I was on the street [since] 1980 [and] No bear market has ever traded more than nine times to 14 times the previous peak earnings,” the founder of Chanos & Co. told CNBC.fast money” on Monday.

His latest warning comes in the midst of earnings season, two days before the Federal Reserve’s interest rate decision and four days before the key January employment report. According to Chanos, the market will not be able to cope with higher prices and lower corporate profitability.

“Things aren’t cheap,” said Chanos, who acknowledges that inventories are still cheaper than they were 18 months ago. “But people pricing in a very nice Goldilocks script.”

so far this year, Standard & Poor’s 500 by about 5%, with media, Technique And Airlines driving gains. On Tuesday, the index fell 1.3 percent to close at 4,017.77.

Chanos notes that the market expects corporate earnings to rise 12% this year, inflation 2% and the Fed rate cut over the next six to seven months.

“That’s pretty much a nirvana if you’re a bull,” he said.

chanos, Who said he doesn’t try to time the market? Doubt that the scenario of the rise will be revealed.

“If you think profits It now peaks at $200“This is a long way to go,” Chanos said. This is 1800 to 2800 [on the S&P 500]. We’re not anywhere close to that.”

Not giving an opinion

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