‘I think the stock market is still fine for now.’
Hedge-fund legend David Tepper isn’t sweating the change in tone by the Federal Reserve at its June policy meeting, offering reassurance in remarks to CNBC on Thursday morning. Tepper, the founder of Appaloosa Management, has one of the strongest track records among active investors, and his remarks often move markets.
Investors overall also appeared to be taking the changes, which saw Fed policy makers pencil in two rate hikes by the end of 2023 and Chairman Jerome Powell acknowledged that discussions around the eventual tapering of the central bank’s $120 billion-a-month asset-buying program had begun.
Stocks sank Wednesday, but finished off session lows, following the Fed’s pronouncements. Price action was choppy early Thursday, with major benchmarks flipping between small gains and losses. The Dow Jones Industrial Average
was off around 160 points, or 0.5%, while the S&P 500
traded near unchanged and the Nasdaq Composite
There was no sign of a tantrum in the Treasury market, with the yield on the 10-year note
retreating 1.8 basis points to 1.54% after rising modestly on Wednesday. Yields and bond prices move in opposite directions. The dollar found support, however, with the ICE U.S. Dollar Index
up 0.7% to build on Wednesay’s rise.
Tepper in March told CNBC that it was very difficult to be bearish on stocks, arguing that a selloff in Treasurys that had driven up yields and unsettled investors across financial markets had likely run its course. Tepper was on the mark, with yields stabilizing and eventually edging back below 1.5% ahead of Wednesday’s Fed meeting, while stocks ground higher, with major benchmarks pushing on to record territory.