Stock market has become 'get-rich-quick' scheme ignoring risks: Rosenberg

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The US stock market has become a 'get-rich-quick' scheme that's ignoring oncoming economic pain, top economist David Rosenberg says

"There is no chance we're having a soft landing in the context of the most pernicious tightening by the Fed since the Paul Volcker years," Rosenberg said.

The central bank has raised interest rates by 500 basis points over the past five quarters in a bid to cool historically high inflation. The aggressive policy tightening succeeded in slowing the pace of consumer-price increases to 3% in June from 9% a year earlier, but investors still expect the Fed to raise rates again at its July meeting.

Speaking on whether the equity market's buoyancy this year could be good news for the US economy, Rosenberg said"the stock market seems to be the odd-man out."He added that stocks' movements don't reflect what's going on in the economy."So the fact that we now have a speculative frenzy, animal spirits coming back and driving up the multiple in the stock market is just a stock market story. It's not telling you an economic story," he told the outlet.

"Right now the stock market has become a get-rich-quick scheme like it was during the meme-stock mania two years ago," Rosenberg continued. For months, Rosenberg has warned about an inevitable US recession. He has also predicted that the S&P 500 could plunge and rang the alarm on American consumers

 

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