Billionaire Paul Tudor Jones said workers in the U.S. should start thinking about resuming a different kind of life after the worst of Covid-19 — one with widespread testing and periodic self-isolation.
The legendary trader and hedge fund manager, who said his daughter has the virus, told CNBC Thursday that he believes cases of the disease will likely peak in the U.S. in early April. While markets could edge lower in the interim, stocks should rally once cases peak, and equities will be higher three to five months from now, he said.
“We’re going to see the worst of COVID-19, it’s going to throw its best punch over the course of the next few weeks and then we’re going to be on the back side of that,” Jones said. “We’ve got to look through these numbers, look through the tragedy of the next few weeks, think about how we’re going to restart our lives, think about how we’re going to deal with the new normal and think about how we’re going to restart America.”
Over the past three weeks, the U.S. central bank has introduced an unprecedented series of measures, pushing it deep into uncharted territory as it seeks to cushion the blow of the coronavirus on financial markets and the U.S. economy. The steps include massive bond purchases, emergency facilities to bolster credit markets, actions with foreign central banks to ease the supply of dollars worldwide, and programs for lending directly to American businesses.
The U.S. Senate approved a $2 trillion aid bill Wednesday night that is on its way to the House of Representatives. The package contains loans, tax breaks and payments to corporations and individuals along with additional funds for the U.S. Treasury that can be used to boost the Federal Reserve’s lending firepower.
Investors can “take heart that we counteracted this existential shock with the greatest fiscal monetary bazooka — it’s not even a bazooka, it’s more like a nuclear bomb,” Jones said.
Jones was one of the first hedge fund managers to sound alarms about the virus in late January. At the time, he said “there’s zero way I’d want to be long until — we really need about two weeks to see what type of spread we get.”
The flagship hedge fund at his firm, Tudor Investment Corp., gained about 1.5% in the first two months of the year.
On Thursday, Jones said we would have to practice extreme safety measures until we see the number of cases fall dramatically. “That’s going to be sometime in late April or early May. That would be optimistic,” he added.
Workers should be able to resume their lives if the government implements widespread testing and contact tracing that will enable sick individuals to isolate for periods of time and then resume work.
Jones also urged businesses and policymakers to start thinking now about how society will resume once the worst of the epidemic has passed.
“I’m much more nervous about the loss of life that comes with with a 15-20% unemployment rate,” than the loss of life from the virus, he said, citing suicide, drug use and health impairments that come when people lose their livelihoods.
–With assistance from Joshua Fineman.
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