US Stocks Could Fall 20% Says Asianomics Director

February 5, 2014 Share Print 0

Following weeks of heavy selling U.S. stocks have eked out gains early this week, but one analyst told CNBC the respite will be short-lived and tips a 20 percent correction this year.

“The thing that would surprise me [in 2014] would be if the U.S. bounces back – we were really expecting it to be down about 20 percent this year… Our big call is long India, short U.S.,” said Jim Walker, founder and managing director of Asianomics.

Walker’s view on U.S. equities goes against the grain, amid more bullish sentiment on the world’s largest economy following a year of stellar stock market returns and marked pickups in leading economic indicators, such as employment and housing data.

Although the contrarian investor agreed that U.S. economic fundamentals look healthier, he said it’s important to remember that the Federal Reserve’s quantitative easing program has been the key driver of asset prices, and that program is currently being unwound.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.