Bill Gross: China Stocks Will Drop 5-6% Friday $VXX
Bill Gross of Janus Capital spoke with Bloomberg’s Tom Keene about the state of the global economy.
Gross said China’s stock markets are likely to drop 5-6% on Friday: “Based upon the ETF in the United States, China is predicted to be down 5 percent or 6 percent…But China is an artificial market. All global markets are artificially based. And to the extent that we have a catharsis, I think, depends upon central banks basically giving up in terms of what they do. I don’t think that’s going to happen.”
When asked whether the market turmoil will cause Chair Yellen to say the rate hike is done, Gross said: “I don’t think she’ll say that. They’ve been on this track of raising interest rates for so long that she’s not going to come out with one or done. She may come out there — someone may come out — Fischer perhaps — will come out and acknowledge the fact that global markets and that global financial conditions are an important consideration in terms of future policy. But I don’t think they’re going to divulge that they are not raising interest rates for times as Stan Fischer said a few days ago.”
Gross said Central Banks have replaced homeowners as too levered: “Home owners are being replaced by central banks and central banks are writing endless checks of trillions of dollars and supporting stock markets and ultimately you can make the argument that they don’t run out of cash.”
Source: Bloomberg Television