The U.S. is in a “protracted bear market” and stock prices could fall further, according to Anthony Scaramucci, an investor and former White House communications director.
“I actually think we’re now in a secular bear market,” he told CNBC’s “Capital Connection” on Monday. “As the economic data comes out, we’re going to be in a fairly steep recession.”
His comments come as America and the world grapple with the fallout from the ongoing coronavirus pandemic. Global markets have been volatile and under pressure as cases continue to rise past 294,000. The World Health Organization has also reported nearly 13,000 deaths.
The Dow Jones Industrial Average is down 32.81% from the beginning of the year, while the S&P 500 index has fallen 28.66% over the same period.
“We’re in a protracted bear market,” said Scaramucci, who is founder and managing partner at investing firm SkyBridge. “I think there’s at least 10% to 15% more to go in equity prices here.”
In the short term, however, he said he is optimistic because of the expectation that Congress will approve economic stimulus for the country.
On Sunday evening, a huge funding package failed to get enough votes in a key Senate procedural vote.
“I predict that they will get a deal done. They know how sensitive this is for markets,” Scaramucci said. “It may come before the (market) opening, but if it doesn’t, my guess is it will come after tomorrow’s close.”
He said the stimulus will send a message to U.S. citizens that the government is there for them “in a time of crisis like this.”
“I’ve told people, this is so much worse than the global financial crisis. It’s literally 9/11 plus the global financial crisis,” he added.
Impact on 2020 US elections
Scaramucci, who is a frequent critic of U.S. President Donald Trump, also weighed in on the impact of the coronavirus outbreak on Trump’s reelection chances.
“If he executes on the stimulus, I think he comes out of this very strong,” he said. “I think people will recognize that he’s going into the recession because of the war on the virus.”
Trump has been criticized for the way the administration responded to the outbreak.
“I think it’s still a toss-up, going into November,” said Scaramucci, noting that the Democratic base and many independents are “fired up and angry” at Trump.
He previously said Trump would lose the election. “Now I think it’s probably even money.”