Hedge fund manager Paul Tudor Jones told CNBC on Thursday the market could be higher by June despite what he sees as a turbulent month ahead.
“My guess is one of the reasons the market’s up right now is because of all the month-end rebalancing. The market’s front-running, it sees the fact that there are going to be a lot of equities to buy,” Jones told CNBC’s “Squawk Box.” “That’s one reason my guess is we’ll stay firm into month-end and then we’ll be challenged in April,” as the market digests a peak level of coronavirus cases.
“I think that could bring us to a retest, it might even bring us to a fractional new low. But I do think the stock market’s going to find a bottom once we get a peak in the epidemic curve, [there’s] not a doubt in my mind the stock market will rally,” he continued. “My guess is we’ll be higher three or four months from now, five months from now, than lower than where we are right now.”
The comments by the billionaire founder of Tudor Investment and Just Capital came amid one of the most violent Wall Street sell-offs in recent years with the Dow Jones Industrial Average and S&P 500 down at least 26% from their respective all-time highs hit last month. Minutes after the interview, the Labor Department reported a surge in weekly jobless claims to 3.28 million, shattering the all-time mark of 695,000 in October 1982.
Investors have punished riskier securities like stocks as a growing number of economists warn that COVID-19, and efforts to contain its spread, could thrust the U.S. economy into a recession.
The disease has killed more than 1,000 people in the United States, according to Johns Hopkins University.
Jones on Thursday urged Americans not to panic or blow the illness out of proportion, saying the disease will eventually pass. He said his daughter, in her mid-20s, contracted a “mild case” of COVID-19 and is doing fine as she works through it.
“We’ve got to be careful not to mythologize this particular disease,” he said. “We’ve got to be careful not to mythologize this into the pandemic Godzilla. We can beat this thing.”
The investor noted that even though COVID-19 spreads at a rapid pace, its death toll on the U.S. is still a fraction of what the flu often exacts in any given year.
Jones reportedly was among the top investors who spoke by telephone earlier this week with President Donald Trump and Vice President Mike Pence about the economy amid the coronavirus outbreak. Jones rose to Wall Street fame in the late 1980s after calling the 1987 market crash and is widely considered a pioneer in the hedge fund industry.
Jones has been focused on his relatively new Just U.S. Large Cap Equity exchange-traded fund, which scores businesses on factors including environmental issues and how employees are treated.
Goldman Sachs launched the ETF in 2018 using a model from Jones’ foundation, Just Capital. At launch, the ETF tracked Russell 1000 companies including Apple, Amazon and Bank of America.
The fund returned about 31.5% in calendar 2019, before investors began worrying about the spread of COVID-19.
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Paul Tudor Jones thinks the market could be higher by June despite expectations for a turbulent April.