The investor millionaire David Tepper considers that Wall Street has reached a level of overvaluation only comparable to that registered in 1999, before the outbreak of the bubble of the ‘’. “It is the second most overvalued stock market I have ever seen,” he told CNBC.

For the founder of Appaloosa Management, there has been a “bad capital allocation“in certain” niches “of the American stock market after the stimuli of the Fed. In the opinion of this influential financial shark, the great tech who have led the Wall Street rebound since the March lows “are fully valued

The price-benefit ratio of the S&P 500 for the next 12 months it has skyrocketed to more than 20, a level not seen since 2002. The world’s leading indicator has bounced over 30% since the lows of March, although the index that has led the increases has been the Nasdaq, which is trading positively so far this year and has been at a 5% of its all-time highs for February.

“The fact that Amazon being perfectly positioned does not mean that you are not fully valued. Google or Facebook they are advertising companies and are fully valued, “he noted, so he does not see any upside potential from these levels.

In your opinion, “it is possible” that the market has made soil in March, “but That does not mean that you cannot fall significantly from these levels.“, has added.

Its valuation is situated with that recently carried out by the analysts of Bank of America Securities, who even expect new lows for Wall Street in the coming months. “If history is a guide, Wall Street will return to the March lows,” they said last week.

Given the strong relationship between the duration of bear markets and that of recessions, they explain, stocks are discounting a mini recession, despite the fact that the forecasts anticipate that it may be the worst in history. “There may be a time to co-invest in stocks with the Fed,” they add, “but it will surely be at lower prices

In this sense, the president of the Federal Reserve (Fed), Jerome Powell, has described the current recession in the United States caused by the coronavirus as “significantly worst since World War II”. For this reason, it has asked for more fiscal and monetary stimuli to mitigate the impact of the pandemic.