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Stock market crash in 2021 unlikely due to strong fundamentals, XOUT Capital CEO says

Stock market crash in 2021 unlikely due to strong fundamentals, XOUT Capital CEO says
Jordan
Major
3 months ago
3 mins read


There are very few fundamental concerns to the stock markets right now amidst the growing fears, according to the CEO of XOUT Capital, David Barse.

In an interview with Kitco News anchor David Lin, when asked whether we “are going to have a broad market crash before the end of the year,” Barse stated:

“I just believe that unless there is another unforeseen event, like a virus that spreads across the globe or some kind of disaster occurring, there won’t be a market crash that folks are looking for or calling for.”

The Chief Executive Officer elaborated:

“The fundamentals continue to be strong, and the macro environment is continuing to provide stimulus growth for those companies that are failing to achieve growth for whatever reason.”

Areas affected

Companies in the utility or energy area, according to Barse, would struggle, but those in the digital and finance spaces will flourish; thus, the concept is ‘irrational’ to him.

The CEO believes that when people talk about a crash, they’re talking about a single-digit correction weekly, which is possible, especially in volatile markets.

Unless there is a significant regulatory change that will damage many of the influential technology firms that are driving blood market performance, Barse does not see a market collapse happening.

Thoughts elsewhere

On the other hand, Michael Burry and Jeremy Grantham are prepared for a severe financial market crash. However, they are far from the only experts who warn that excessive speculation fuelled by government stimulus programs will not be able to keep asset prices stable indefinitely.

Elsewhere billionaire investors such as “Shark Tank” star Kevin O’Leary, market forecaster Gary Shilling, and author of the personal finance book “Rich Dad Poor Dad” Robert Kiyosaki.

Kiyosaki, for example, tweeted in June that he expected the worst market fall in history and criticized the Federal Reserve for overstimulation and depreciation of the dollar. He has encouraged investors to store up on precious metals and cryptocurrencies in preparation for a collapse.

March 2020 collapse

If one were to cast a cursory glance at the market, one would notice that equities have continued to rise since last summer, and compared to the fall back in March 2020, the S&P 500 index is up almost over 100% since then.

April 2020 – July 2021 S&P 500. Source:TradingView.com

Nevertheless, because the economy still does not reflect where the market is fundamentally, it is difficult for market experts and observers to justify values at current price levels where the ongoing growth is headed. 

There is an argument that the economy is not performing as it should, and inflation will become an issue.

Related video: Stock market crash is ‘irrational’ unless we get ‘disaster’

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.