Ken Griffin, hedge fund billionaire and founding father of Citadel, is reportedly rising his deal with credit score buying and selling as he anticipates a possible recession.
“We’re rather more cautious about 2024,” he advised Bloomberg in an interview in Hong Kong, referring to his outlook for the USA. “We’ll take a look at the credit score markets as a supply of alternative. Credit score must be a significant contributor later this yr,” he mentioned.
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Griffin mentioned Citadel is especially targeted on the high-yield credit score market, with a mix of lengthy and quick methods. He expects the Federal Reserve to hike rates of interest yet one more time this yr after which pause for an prolonged time period.
Wall Road cheered Tuesday’s inflation numbers with expectations concerning the Fed pausing its fee climbing cycle in June coverage gaining momentum. The Nasdaq Composite closed 0.83% increased whereas the S&P 500 gained 0.69%. The SPDR S&P 500 ETF Belief SPY closed 0.66% increased on Tuesday whereas the Invesco QQQ Belief Sequence 1 QQQ rose 0.77%, in line with Benzinga Professional.
Griffin additionally mentioned it is unbelievable how enthralled persons are by generative AI. “Traditionally, technological innovation has led to the creation of extra jobs. The problem is how will these applied sciences adversely influence sure sectors of the economic system and sure forms of jobs disproportionately,” he advised Bloomberg.
On China: Griffin is optimistic about China as he expects the nation’s financial progress to surpass the federal government’s targets. “There is a common degree of uncertainty as to the extent of progress in China in the present day,” he mentioned. “We’re really extra constructive on progress and a bit north” of estimates for a 5% growth, he mentioned in line with the report.
The billionaire investor additionally identified that Citadel stays excited by China for the long run. “Regardless of who’s the U.S. president within the subsequent cycle, I do not assume that is going to vary Citadel’s technique” in China, he mentioned. “The size and scope of the Chinese language fairness market is extremely engaging to us as buyers.”
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