The first quarter of 2021 will see a sharp rise in stocks after the stimulus has passed, according to billionaire investor Paul Tudor Jones.

Paul Tudor Jones
  • Billionaire investor Paul Tudor Jones told CNBC that the stock market could see a sharp rise in early 2021 due to the stimulus for the next financial year.
  • Jones pointed to the stock-buying spring after the first excitement passed in the spring. “Robinhood nation … went crazy and bought shares,” he said.
  • He also discussed how Biden’s tax plan would help the main street, but could cause financial assets to “suffer greatly” in the long run.

Billionaire investor Paul Tudor Jones told CNBC on Thursday that the stock market could see a sharp rise in early 2021 after the next stimulus passes.

“At some point in the first quarter of next year, you will have to turn a blind eye to whatever the level may be, as people get cash from this first stimulus program and they invest it in a variety of financial assets,” Jones said.

The founder of Tudor Investment Corp. hinted at buying large quantities last spring after passing the Care Act Stimulus Bill.

“Robinhood nation … went crazy and bought shares,” Jones said.

It expects the stimulus to pass in the next six to eight weeks and total 1.7 trillion. But the end of 2020 could be boring for stocks, he added.

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“I could easily see a situation where the market sells out at the end of the year, and then you can start that early start of the year’s boom, which could probably be part of the middle by the end of the first quarter, definitely the first quarter,” he said.

Jones also said that if Biden wins the presidency because of his capital-gain tax plan, there will be “massive” damage to financial assets in the long run.

“If you go back and look at history there’s an inverse relationship – it’s loose but it’s clear – in the multiplication of stocks and capital-gains tax,” he said.

“I think the Biden tax plan is really going to do what it’s designed to do, to help Main Street, to help the average American,” Jones said. “And it will come at a cost of 1%, mainly whose assets are included in the stock market and financial assets, and it will come at their expense and you will probably get a lot of contraction, and you’ll probably get some kind of average reversal.”

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