Marc Faber: Market Has Discounted Quantitative Easing Unlimited
Marc Faber, publisher of the Gloom, Boom and Doom Report, was interviewed on CNBC yesterday and provided his latest assessment of the markets.
Faber mentioned recent weakness in the stock markets of Turkey and Japan, both of which have declined by 15%. He said the S&P 500 could make a new high, but it wouldn’t be confirmed by the majority of shares. Faber believes the market is “quite vulnerable.”
Faber said stocks like Coca Cola (KO), Walmart (WMT), McDonalds (MCD), and Procter and Gamble (PG) have most likely peaked out.
However, Faber believes there are stocks that could continue to appreciate (mentioned Intel, Microsoft and IBM) because all of the money flows into fewer and fewer stocks, as he put it. He added that the S&P 500 could hit 1700, but he wouldn’t bet on it.
Faber stated that if someone put a gun to his head and said he had to be long or short, he would take the short side.
The interview continued with a discussion of Nouriel Roubini’s comments from the day before and the forecasting record of economists in general.
Faber mentioned a weak global economy evidenced by reports from McDonalds and Caterpillar.
Faber stated the market is a discounting mechanism and has discounted what he referred to as, “Quantitative Easing unlimited.”
The interview segued into a discussion of China, which Faber believes is in a huge credit bubble. He also defended himself against questions regarding his accuracy.
Faber said he was buying Vietnamese shares and considering investments in Chinese opportunities.
Faber said there is no exit strategy for the Federal Reserve and elaborated on the reasons why (they are in too deep).
In early April, Faber gave reasons why he expected stocks to rise and then crash in the summer [link].