Legendary investor Leon Cooperman mentioned he purchased shares in the course of the market’s newest sell-off.
“We did no promoting and we really put a bit more cash to work,” Cooperman, chairman and CEO of Omega Advisors, advised CNBC’s “Halftime Report” on Wednesday. “General I believe the market outlook is OK, and I believe good shares choice will likely be rewarded.”
The foremost inventory averages fell greater than 5 p.c between Friday and Monday earlier than rallying not less than 1.7 p.c Tuesday in a really unstable session. On Wednesday, the Dow Jones industrial common, S&P 500 and Nasdaq composite added to Tuesday’s positive factors.
Some merchants attributed the market’s pullback to worry of rising inflation — which lately despatched rates of interest greater — computerized buying and selling and sharp strikes in obscure volatility funds that use leverage. However Cooperman mentioned he stays constructive on shares even after the sudden decline.
“However the craziness out there, my solely [outlook] change is that I do not suppose the market has the 15 p.c draw back that I believed it had when it got here into the yr,” Cooperman mentioned. That is primarily “as a result of the economic system is performing higher and earnings are doing higher.”
This company earnings season has been sturdy. Of the S&P 500 firms that had reported as of Wednesday morning, 78 p.c had introduced better-than-expected earnings, in response to Thomson P3P I/B/E/S.
Current information additionally level to additional financial progress. Final week, the Labor Division mentioned the U.S. economic system added 200,000 jobs final month, beating expectations. Wages, in the meantime rose 2.9 p.c on an annualized foundation, the most important achieve since 2009.
Cooperman additionally mentioned he thinks the market may retest the lows made in the previous couple of days, “however I believe one would blow the all-clear sign.”
“Bear markets do not materialize out of immaculate conception. Bear markets come about from sure elementary causes. It is the economic system, it is the [Federal Reserve], it is inflation and issues like that.”