Key Takeaways
- • Paul Tudor Jones, founder and chief investment officer of Tudor Investment, told CNBC's "Squawk Box" that 2027 could be one of the most difficult years for U.S. stocks in roughly two decades, citing the most negative equity flow picture since 2002.
- • Jones attributes the coming pressure to a wave of equity supply from large offerings expected from Anthropic and OpenAI, a recently completed SpaceX offering, and potential secondary offerings by companies funding AI infrastructure.
- • Jones said he will be short the U.S. stock market for the whole of 2027, arguing there is little value, and drew a parallel to heavy issuance during 1998-2002.
- • Jones said he is long oil and expects it could rally another $20 to $25 after the midterms.
Summary
Paul Tudor Jones, founder and chief investment officer of Tudor Investment, told CNBC on Tuesday that 2027 could be one of the most difficult years for U.S. stocks in roughly two decades. In an appearance on CNBC's "Squawk Box," Jones said, "2027 is going to be really, really challenging for the stock market," adding that the market faces "the most negative flow picture for the U.S. stock market that we've had, say, since 2002."
Jones said that for much of the current four-year bull run, corporate buybacks and M&A activity had acted as a favorable force by reducing the amount of stock available to investors. He argued that dynamic is now reversing. He pointed to expected large offerings from Anthropic and OpenAI in the AI sector, a recently completed offering from SpaceX, and likely secondary offerings as companies seek to fund AI infrastructure spending.
Jones drew a comparison to the period around the dot-com bust, noting that heavy issuance in 1998, 1999, and 2000 through 2002 created persistent downward pressure. "Those were the easiest years to be short because you kept having these unlocks that just kept adding supply to the market," he said. He stated, "I'll be short the whole year. There just — there's little value."
Jones credited enthusiasm about artificial intelligence with powering a rally that has seen the S&P 500 more than double since the bull market began. According to CNBC, investors are weighing concerns over inflation, higher bond yields, and a more hawkish Federal Reserve. Jones also said he is long oil and that it could rally another $20 to $25 after the midterms, a development he said the stock market would "hate." Earlier, in May, Jones had disclosed buying more AI-linked equities while monitoring parallels to prior technology cycles, and he likened the current environment to 1999, roughly a year before the dot-com bubble burst.
Jones said that for much of the current four-year bull run, corporate buybacks and M&A activity had acted as a favorable force by reducing the amount of stock available to investors. He argued that dynamic is now reversing. He pointed to expected large offerings from Anthropic and OpenAI in the AI sector, a recently completed offering from SpaceX, and likely secondary offerings as companies seek to fund AI infrastructure spending.
Jones drew a comparison to the period around the dot-com bust, noting that heavy issuance in 1998, 1999, and 2000 through 2002 created persistent downward pressure. "Those were the easiest years to be short because you kept having these unlocks that just kept adding supply to the market," he said. He stated, "I'll be short the whole year. There just — there's little value."
Jones credited enthusiasm about artificial intelligence with powering a rally that has seen the S&P 500 more than double since the bull market began. According to CNBC, investors are weighing concerns over inflation, higher bond yields, and a more hawkish Federal Reserve. Jones also said he is long oil and that it could rally another $20 to $25 after the midterms, a development he said the stock market would "hate." Earlier, in May, Jones had disclosed buying more AI-linked equities while monitoring parallels to prior technology cycles, and he likened the current environment to 1999, roughly a year before the dot-com bubble burst.
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