Gary Shilling says the S&P 500 may crash 30%, a recession will hit

Legendary market forecaster Gary Shilling has warned of a potential 30% crash in the S&P 500, stating that stocks are "very expensive and very distorted." He also predicts a recession this year, and believes that the hype around bitcoin and AI is overblown. Shilling compared the current market situation to the "Nifty Fifty" group of stocks in the 1970s, which eventually plummeted in value, and warned that the S&P 500 could fall below 3,500 points, its lowest level since late 2020.

Shilling also cautioned that future stock gains could falter due to modest economic growth and high valuations. He pointed to several "classic signs" of recession, including an inverted yield curve, declines in leading economic indicators, and weakness in the Small Business Jobs Index. Additionally, he warned that US consumers have nearly exhausted their pandemic savings and the resumption of student-loan repayments would further strain finances. Shilling also criticized the "excessive speculation" driving bitcoin demand and expressed skepticism about the transformative potential of AI technology.

Key takeaways:

Market forecaster Gary Shilling has warned that the S&P 500 could crash by 30%, and the US economy could face a recession this year.
Shilling believes that stocks are currently very expensive and distorted, and could disappoint investors in the future.
He also criticized the excessive speculation around bitcoin and the overhyped expectations of AI technology.
Despite his warnings, both the stock market and the economy have continued to perform strongly in recent months.

Gary Shilling says the S&P 500 may crash 30%, a recession will hit — and bitcoin and AI are both overhyped

Key takeaways:

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