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Monetary Matters with Jack Farley
20% Decline In Stocks By First Quarter 2025? Felix Zulauf on a Bubble In S&P 500, Yen Carry Trade, and Bond Market Rollercoaster
Dec 12, 2024
Felix Zulauf, a renowned macro investor and founder of Zulauf Consulting, shares his insights on market trends and economic forecasts. He predicts a significant correction in the S&P 500 by early 2025, sparking concerns over the Yen carry trade and its potential impact on liquidity. Zulauf discusses the precarious balance in bond yields amidst a secular bear market, alongside the outlook for commodities like oil and gold. He emphasizes the complex interplay of tariffs, economic disparities, and the unpredictable ride that 2025 may bring for investors.
56:49
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Quick takeaways
- Felix Zulauf predicts a significant correction in the S&P 500, potentially exceeding 1000 points by early 2025, indicating market vulnerability.
- The podcast discusses how global economic trends, particularly in Europe and China, are complicating commodity performance amidst looming market corrections.
Deep dives
Current Market Bubble Dynamics
The U.S. equity market is currently characterized as a bubble, with valuations reaching historical highs. Analysts indicate that, depending on various metrics, the market is at its highest or second highest valuation in 140 years. The growth of the bubble hinges heavily on liquidity, which has historically needed to expand to maintain rising prices. Recent data shows a significant reduction in liquidity within the financial system, suggesting that without continued growth in this area, the bubble may face imminent risks.
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Discover
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Listen to the best highlights from the podcasts you love and dive into the full episode