- Asset-bubble expert John Hussman has warned investors may want to “buckle up” ahead of a fourth-quarter recession.
- “If recession was to begin in Q4, the time to buckle up would be right now,” the notorious market bear said.
- Hussman has long been pessimistic about the US economy and stocks, warning of a deep plunge in equities for years.
A long-time stock-market bear who successfully called the 2000 and 2008 crashes has warned investors may wanted to “buckle up” ahead of a potential US recession by year-end.
“If recession was to begin in Q4, the time to buckle up would be right now. Not measurable in real time, but the worst equity market outcomes begin ~2 months prior to recession until ~4 months prior to recovery,” John Hussman, president of the Hussman Investment Trust, said in a post on X.
“Not a forecast, just FYI,” he however stressed.
US recession calls are heating up again as investors fear that a combination of dwindling consumer savings, student loan repayments, and shrinking money supply could choke economic growth.
Hussman recently warned that “far deeper market losses will emerge” for stocks as valuations remain high relative to Treasury yields. He also criticized the Federal Reserve’s policies over recent years, saying they have contributed economic imbalances that could potentially lead to a financial crisis.
In July, Hussman warned the benchmark S&P 500 share index would have to plunge an eye-watering 64% peak-to-trough for the market to return to more balanced conditions.
The bubble expert’s downbeat views stand in contrast to the resilience of the US stock market and economy so far this year.
The S&P 500 and tech-heavy Nasdaq-100 have rallied so far this year, surging about 15% and 39%, respectively, as falling inflation kindles hope that the Fed’s could soon end its interest-rate increases, and amid investor excitement around the rise of artificial intelligence.