Highlights
- Hedge fund manager Paul Tudor Jones expects the Fed is done raising rates.
- Stocks could have clear sailing for the rest of 2023.
- Bitcoin is looking boring due to U.S. regulatory pressure.
It could be clear sailing for the stock market for the rest of 2023. Billionaire hedge fund manager Paul Tudor Jones has predicted that the Federal Reserve, whose interest rate campaign has weighed on the markets, is coming to a close.
Cautiously Bullish on Stocks
While stocks remain volatile, with the three major indices under pressure today, the worst could be over. This is the message that Jones shared with CNBC, saying that he believes the Fed is done raising rates for now.
Inflation has finally begun to show some signs of easing, as evidenced by the latest CPI reading of 4.9%. The inflation gauge has been steadily moving lower for the past 12 months straight.
While Jones is not “rampantly bullish,” he does believe that stocks will grind higher for the rest of 2023. This is welcome news to investors considering that in 2022 the broader stock market lost nearly 20%. The S&P 500 has advanced about 7% year-to-date.
Boring Bitcoin
Meanwhile, Jones is less optimistic about the bitcoin price in the near term. The regulatory uncertainty in the United States has created a “real problem” for the flagship cryptocurrency, he noted.
The BTC price is currently hovering just below $27,000, a far cry from its high of close to $70,000 per coin. Gold and bitcoin have been hedges in the high-inflation economy. However, now that inflation is easing, that story may be played out.
However, the trader is not giving up on bitcoin and will be sticking with it despite the uncertainty in the cryptocurrency market. He is a fan of bitcoin because of its finite supply of 21 million coins, saying “it’s the only thing that humans can’t adjust the supply in.” Jones is willing to have a small amount of exposure to bitcoin for diversification in his portfolio.
U.S. Debt Default Worries
The big thing weighing on investors is the possibility of a U.S. default on its debt. According to a Bloomberg survey of institutions and individuals, investors would prefer owning bitcoin over the U.S. dollar in the event of a default.
But gold shined as the No. 1 asset investors would prefer to have in their portfolios in a default, more than bitcoin. Treasuries came in second place because investors are confident that the U.S. would pay its debt at some point. Bitcoin was the third choice.
