‘I think this could be a lost decade in terms of stock appreciation.’
Blackstone’s official Tony James warned investors not to expect much from the US stock market over the next decade.
Speak to CNBC Investors in the private equity group “Squawk Box Asia” held at a virtual Singapore summit on Wednesday said the company will have a hard time generating strong returns over the next decade. It offers higher interest rates in the future that will increase the cost of US businesses.
James said that if former Vice President Joe Biden won the White House in November, the expected tax hikes and tightening regulations would lead to higher costs and lower revenues, which could stop the wind in the stock market.
“All of this will be an economic headwind for businesses. So I think you can have disappointing long-term revenue growth. The multiples come out little by little, and you can see poor stock returns over the next five to ten years,” he told CNBC.
James believed that the Federal Reserve prevented financial markets from falling off cliffs due to the coronavirus pandemic.
Blackstone officials came out because the U.S. Central Bank is scheduled to issue a regular policy statement at 2pm EST, and Jerome Powell is scheduled to hold a press conference late Wednesday.
Meanwhile, the market is showing mixed trends. Dow Jones Industrial Average DJIA,
S&P 500 index SPX,
The Nasdaq Composite Index COMP, which has made some gains and is full of technology,
It was under pressure.
Certainly, James isn’t the first to predict 10 years of stock loss. In June, Bridgewater Associates Ray Dalio told a hedge fund customer “10 year loss”.