In his latest commentary, John Hussman, president of Hussman Investment Trust, stated that he has a defensive outlook for the stock market.
“Amid the most extreme valuations in history, we’ve observed gradual deterioration in our measures of internals in recent months, with breakdowns among individual stocks in the broad market accelerating in recent weeks,” he said.
Hussman is relatively optimistic on the COVID-19 front, saying that “we’ve reached the peak of the Delta wave” and expects that the “pandemic will rapidly subside in the weeks ahead”.
However, on the economic front, Hussman thinks a reduction in Federal deficit spending will offset the expected increase in private economic activity.
“It’s not at all clear that gross economic activity will increase,” he said.
Similarly, Amanda Agati, chief investment officer at PNC Financial Services Group, told CNBC on Friday that the signs point to “peak growth” right now.
This could set the stock market up for a correction.
“It’s just trying to be really realistic about how far and how fast the market has rallied and how extended valuations really are across the board, leaving fairly little headroom in the short run here for the market to keep forging this path higher,” she said.
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