The Blubber

Per Market Insider

Jeremy Grantham, the co-founder of Batterymarch Financial Management in 1969 and an astounded economist with Royal Dutch Shell, has recently given a statement saying the bubble could enter its "final phase" this year as he expects the stock market to crash by 50%.

While stocks were battered in 2022, Grantham expects the market to drop by another 20%, with the worst-case scenario dropping by up to 50%. The statement also described how the market bubble could enter the "final phase" of the stock market.

Grantham noted that the downturn in the housing market would result in a cap on the ongoing deterioration of financial conditions. The bubble is expected to result in the S&P 500 dropping to 3,200 by the end of 2023.

The investor noted that the worst-case scenario would result in a 50% drop in the S&P 500, dropping it down to as low as 2,000. Grantham's warning about what could happen in the present year.

Grantham: "To put this in perspective, it would still be a far smaller percent deviation from trendline value than the overpricing we had at the end of 2021 of over 70%."

The report by Market Insider says that the determining factor as to what could happen to the market would be investor confidence. The note also highlighted how the market could experience a substantial drop, like in 2000 or 2007, if investors lose confidence.

This came when the world economy was headed towards a three-decade low, with the slowest growth expected. The economy grew by just a small 3.2% in 2022, with economists like Scott Johnson expecting a growth of just 2.4% in 2023.

The investment bank Stifel expects the S&P 500 to gain almost nothing in the next decade. The World Bank announced that the global economy could come closer towards a recession in 2023.

See flow at unusualwhales.com/flow.

Other News:

• World Economy Heads Toward Three-Decade Low | Slowest Growth Expected
• The S&P 500 will gain almost nothing in the next decade, Stifel has said

Resources:

Market Insider