Billionaire investor Howard Marks paints grim view of economic outlook: stimulus alone won’t cure ‘down-cycle’

The U.S. stock market has rebounded mightily in recent months but Howard Marks cautions investors to brace for a tough slog in the economy, and that’s even if a fresh fiscal stimulus package can be passed by Congress to help heal the coronavirus-stricken business climate.

“Thus, this down-cycle cannot be fully cured merely through the application of economic stimulus,” the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide, wrote in a lengthy screed, reflecting on the current state of the economy and the market, published on Tuesday.

“Rather, the root cause has to be repaired, and that means the disease has to be brought under control,” he wrote.

Marks says that even with the illness that has infected more than 37 million people globally, economic stimulus alone isn’t likely to reverse the damage that the U.S., and economies across the globe, face.

” The trauma has been deep, and the impact may not be easily shaken off,” the billionaire investor and co-chairman of Oaktree Capital Management writes.

The prominent investor’s comments come as stocks have been mostly scaling a fresh wall of worry headed into the 2020 U.S. presidential elections and a feared period of rising coronavirus cases, with the Dow Jones Industrial Average COMP, -0.10% off less than 3% from its Feb. 12 record high, while the Nasdaq Composite Index COMP, -0.10% and the S&P 500 SPX, -0.63% both stand less than 2% from their all-time highs.

Marks goes on to point out not just problems with a lack of stimulus but the lasting harm of the months-long viral outbreak, which includes the withering revenues of state

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