(Bloomberg) — Citadel’s billionaire founder, Ken Griffin, said the US equity market is showing resilience thanks to a healthy labor market and strong consumer confidence.
Speaking on Wednesday at the CNBC Delivering Alpha conference in New York, Griffin said Citadel is “very focused on the possibility of a recession,” but he struck a less bearish tone than fellow speakers such as Duquesne Family Office founder Stan Druckenmiller, who predicted that one will happen next year.
“The US economy is still strong for people who are going to work every day. In fact I think we’re looking at real wage growth in Q4 this year,” Griffin said.
Consumers are spending more on things like airlines and electronics, which creates “a real powerful tailwind” to the overall economy, he said. “So the forward trajectory on a number of key fronts looks somewhat better domestically, assuming nothing goes totally off the rails.”
The Citadel founder said he thinks the typical 60/40 portfolio of stocks and bonds “is much better today than at any point in recent time.”
Still, the US Federal Reserve has a difficult job ahead of it in using a “blunt tool” — interest rates — to address an overheated economy, Griffin said. He said the Fed should continue on its rate-hike path to “re-anchor” inflation expectations.
The comments come as stocks are rallying after the Bank of England pledged on Wednesday to buy long-dated government bonds in whatever quantities are necessary to restore order to the markets. Wednesday’s gains followed a weeklong rout in US stocks amid central-bank moves intended to fight inflation. Last week, the Federal Reserve hiked interest rates for the third straight meeting and signaled a fourth such increase is likely in November.
Citadel’s flagship Wellington fund gained about 21% this year through July, Bloomberg previously reported. When asked about the fund’s strong performance, Griffin said the vehicle is highly fluid and has made several on-point short-term calls over the past nine months. Energy in particular “has been an unbelievable trajectory” for most of 2022, he said.
Griffin added that another advantage for Citadel has been that its entire team is back at work. Griffin has been a staunch advocate of having staff work in-person, with the firm ranking among the first hedge funds to bring employees back to their desks.
Griffin recently moved his family and businesses to Miami, becoming Florida’s wealthiest person. He’s spent hundreds of millions of dollars on two homes in the state and is shifting Citadel’s headquarters to the Brickell neighborhood from Chicago.
Griffin said it’s “really fun” to be in an environment where “people embrace the future and are hopeful about tomorrow,” while conversations in Chicago are often about the city’s high crime rate.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
