Todd Horwitz, Chief Market Strategist at Bubba Trading, has warned that a ‘massive stock market collapse’ is on the horizon.
More precisely, in an interview published by David Lin on January 4, the analyst went over a number of red flags pointing to rising risks of a broader market correction, including canceled corporate deals, strains in the banking sector, and ongoing stagflation.
Rate cuts, however, are the biggest problem. Horwitz, who stated that he voted for Donald Trump twice, nevertheless said that the president’s further rate cuts would be a “drastic mistake,” reasoning that lower rates primarily benefit banks and government debt rather than average households.
“I think you’ll see I expect to see 40 to 60% in the equities. And I’m not saying it’ll be all next year, but I think over the next run it will be 40 to 60% lower,” Horwitz said.
According to Horwitz, meaningful progress will require curbing federal spending, which has become excessive and inconsistent with the role originally envisioned for the federal government.
“The only thing that rate cuts help is the big money, the banks. That is the only thing that lower rates will help. The average guy, you and me — the rate cuts aren’t going to help us,” he added.
Without restraint on debt accumulation and spending, the interviewee said, policy choices risk reinforcing inflation while doing little to help ordinary workers.
Jobs data will get worse due to AI
Jobs data is another major omen. Namely, Horwitz said that if job losses continue, many displaced workers will struggle to find new employment in what he described as a “technical revolution” that eliminates a large share of traditional jobs.
Like some other analysts, for example, Michael Burry, Horwitz also added that companies like Nvidia (NASDAQ: NVDA), which are at the center of this “technical revolution” due to their dominance in newly emerging tech trends, are “playing a shell game” with their earnings through internal spending. This artificially inflates results and raises valuation concerns.
Ultimately, he warned, reduced earning power generated by this economic environment could ultimately force greater government intervention. Eventually, we could see potential movement toward universal basic income.
While U.S. equity benchmarks, particularly the S&P 500, represent a significant vulnerability and could precede a major market downturn, the market strategist said he remains fully invested in the stock market but recommends actively hedging with investments in derivatives and precious metals.
Gold and silver will extend their rally
Indeed, Horwitz outlined a strongly bullish outlook for precious metals in 2026, albeit with some intermittent pullbacks. Specifically, he predicted gold could reach $6,000, while silver could climb above $80 in the next twelve months. Platinum, he added, is also set to keep advancing, although he gave no specific price targets.
“Look, I believe that there’s a massive collapse coming, but I would expect — and I would not be surprised — to see gold touch $6,000 at some point.”
The rally, Horwitz argued, will be driven by persistent inflation, which he believes is understated by official figures. At the same time, “lousy monetary policy” and “K-shaped economy,” in which only the top 10% benefit meaningfully, will not do equities any favors.
Accordingly, Horwitz said he is skeptical that equity markets can maintain their recent pace of gains. After three consecutive years of double-digit advances, he noted that such a streak has only extended to a fourth year once in history and added that he does not expect 2026 to be the year it happens.
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