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Cooperman: ‘I Don’t Think Powell Laid An Egg’ During Fed Press Conference; HFTs On The Other Hand…..

Billionaire investor Leon Cooperman gives his view on the markets following yesterday’s decision from the Fed Press Conference to slightly raise interest rates.

Leon Cooperman Fed Press Conference
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Leon Cooperman: ‘I don’t think Powell laid an egg’ during Fed press conference

Leon Cooperman and SEC director discuss market structure

Billionaire investor Leon Cooperman and SEC director of trading and market Brett Redfearn discuss market volatility.

[REITs]

Q3 hedge fund letters, conference, scoops etc

Transcript

Let me get your view. Speaking of the markets on where we are post fed.

Well I was in a few weeks ago if I was on a few weeks ago I think I made the comment that if I was a technician which I’m not unfortunately I’m better off in the last month and a half. I was a technician. I would be bearish stocks that dreadful at that time 40 percent of stocks in the S&P 500 down over 20 percent. It’s more now. But you know my approach is fundamentally derived and the things that I look at don’t favor the notion that we’re heading into a bear market. So my view was that it is now own your favorite stocks hold cash and limit your holdings of bonds and extend your own bonds keep the maturity shorter than average. And the argument is I would advance against number one a bear market is not just a price decline in some period of time in a short period of time a bear market is more stocks decline and rising which we clearly have goes on for a prolonged period of time it’s not just you know four six or eight week correction it’s a correction that goes on for some relevant period of time that it is validated by what’s going on in the economy. And when I look at the economy is doing OK. It’s slowing down a little bit and everybody’s hyperbolic but basically it’s slowing down a bit. It’s still growing. Employment is growing every month. OK number one. Number two the monetary policy probably in a minority but I don’t think Powell laid an egg like everybody says he laid yesterday. He basically took the Dotson’s 3 to 2 and he said he’s going to be dependent upon the data. And what do you want him to say at all.

There are and there are plenty of people who want him to saying well let’s go from three to zero.

People of Interest Rate shouldn’t be zero. I don’t think interest rates are the problem for the stock market. You know the S&P now is around 24 85 whatever it is. We have an earnings estimate.

We’re not assuming a recession if you have 172 the S&P is 14 1/2 times earnings. OK that’s slightly below the long term average. The long term average when the multiple was 15 was 60 percent for Kenya governments we’re currently2.8 with less than half the fed funds rate average 5 percent net 50 year period is now somewhere between two and a quarter two and a half every bear market in every recession was preceded by some meaningful real interest rates. Interest rates now are approaching zero in real terms. So you know the Fed is not hostile. I mean if they continue to rise as the market declines that’s going to be a different conversation Mantels think what they did is so unusual yet.

Can you respond though. You know I’ve got I’ve got next to me to my left Mike Wilson of Morgan Stanley who’s been right on the money.

I believe the market is actually lower than he thought it would be at this time. But he’s he’s been better than most. No question about it.

He says we’re in.

We’ve been in a bear market right within this rolling where and I said what I said I was a technician which I’m not I would be bearish stocks that dreadful or they act like when a bear market I don’t disagree with that. The question is What am I going to do today.

What am I to do today. What a half times earnings with the economy is growing modestly but it’s growing basically where my alternative is you know2.8 percent the 10 year government or maybe two short term paper and I say I want to have a combination of cash and my favorite stocks. You know if the average stock in the market is down by 20 25 percent from its peak there’s probably a lot of value was the market value within the market. I mean you know the other thing is you know the psychology doesn’t seem to be suggesting a significant top policy. It’s not really hostile that is when the economy’s OK. I’m not some huge bull you know January was on your program I know it.

I basically I got it caved in a little bit. I said what could be somewhere between now 15 or 10 and I might have for.