"Bond King" Bill Gross said that there are few bull stocks and now is the time to sell instead of buying low; if AI cannot bring about a productivity leap, growth stocks will underperform value stocks.
With weak data and big shots singing the blues, there is a chill in the US stock market.
As non-farm payrolls data dragged the US stock market down sharply, not only did Buffett release a pessimistic signal to the market, but Bill Gross, the "Bond King," was also less optimistic about the US stock market.
Friday morning local time, Gross stated on X platform:
"Today, there are few bull stocks among MLPs (Master Limited Partnerships), bank stocks, and financial stocks."
"Investors should no longer talk about buying on dips, but focus on selling."
Earlier, the latest quarterly report showed that as of the end of the second quarter, Berkshire Hathaway's Apple holdings had dropped by nearly 50% from 0.789 billion shares in the first quarter to about 0.4 billion shares. Since July, Berkshire Hathaway has also cumulatively reduced holdings of about 90 million shares of Bank of America, realizing about $3.8 billion.
Some point out that given the extent of Buffett's selling, and with Berkshire Hathaway only repurchasing $0.345 billion of its own shares this quarter, it means the billionaire thinks the entire market is too expensive.
Warren Buffett's indicator of whether the market is overheated (the ratio of total market value of stocks to GDP) has now skyrocketed to more than 180%, indicating the market is severely overvalued.
CFRA Research analyst Cathy Seifert commented that Buffett's massive sell-off may be due to recession concerns, calling Berkshire Hathaway a "company preparing for a weak economic environment."
Edward Jones analyst Jim Shanahan bluntly pointed out that Buffett's move is "a sell signal":
"The level of selling transactions is much higher than what we expected."
In an interview at the end of July, Gross said that value stocks will outperform growth stocks in the long run with their lower initial valuations and higher dividend returns unless AI companies can raise US productivity from the historical level of 1-2% in the past few decades to 2-3%.
However, some Wall Street analysts still maintain a bullish stance.
Jay Hatfield, CEO of Infrastructure Capital Advisors, said in a report on Friday that the non-farm payroll report confirms that the economy is slowing down, but does not indicate that the US is entering a recession.
He reaffirmed his S&P annual target price of 6000, which still has 12% room for growth from Friday's closing price. Hatfield expects a rebound in the US stock market before the end of the year as the results of the election become increasingly clear.