President Trump lashed out at Wall Street bears Wednesday as the stock market digested fresh warnings about the coronavirus pandemic.
Trump suggested on Twitter that it’s “barely legal” for pessimistic investors to give gloomy forecasts if they stand to profit from market crashes like the one the virus crisis caused.
“When the so-called ‘rich guys’ speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down,” Trump tweeted.
“Then they go positive, get big publicity, and make it going up,” he added. “They get you both ways. Barely legal?”
It’s unclear what prompted Trump’s tweet, but some commenters interpreted it as a jab at billionaire hedge fund manager Bill Ackman, who scored a $2.6 billion profit from a bet against the markets in March as the pandemic sparked a historic selloff.
The week before he cashed out his bet, Ackman begged Trump to shut down the country for a month as he warned that the virus would lead the US into a “depression-era period.”
The Pershing Square Capital boss changed his tune last month, saying he expected a quick economic recovery once the crisis gets under control.
But other Wall Street mavens have echoed Ackman’s initial pessimism. In a Wednesday CNBC interview, billionaire David Tepper called the stock market one of the most “overvalued” he’d ever seen as the Dow Jones industrial average tumbled more than 500 points.
“The market is pretty high and the Fed has put a lot of money in here,” Tepper told the network. “There’s been different misallocation of capital in the markets.”
Tepper’s comments came after DoubleLine Capital founder and so-called “bond king” Jeffrey Gundlach said stocks could fall below their March lows and revealed a short position — or bet against — the market in a CNBC interview last month.
And Paul Singer’s Elliott Management warned clients in an April letter that stocks could tumble 50 percent or more from their February highs, according to Reuters.
Federal Reserve Chairman Jerome Powell — a frequent target of Trump’s ire — added to the anxiety Wednesday as he warned the virus could leave the US economy with lasting scars. Stocks tumbled in early trading following his comments.
Wall Street has nonetheless staged a strong rally since reaching the bottom of the coronavirus crash. The benchmark S&P 500 index closed Tuesday about 31 percent above the low it reached on March 23, but still roughly 15 percent below the all-time high from February.