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In an interview with Reuters, Einhorn, a top
executive at Leon Cooperman's $10.5 billion hedge fund Omega,
said Federal Reserve chair Janet Yellen on Wednesday made clear
that the U.S. central bank will keep monetary policy "easy for
an extended period of time" which is supportive of stock prices.
"I don't think this bull market is over," Einhorn said. "I think
there is still a good deal of time and price left in it, though
I would say that given the advance we have made year-to-date,
that the upside between now and year-end is respectable but not
anything other than respectable."
The benchmark S&P 500 jumped 30 percent in 2013, ending the year
at an all-time high for the first time since 1999. So far this
year, the S&P is up 5.8 percent.
Einhorn said the Fed as well as the business cycle are the main
factors that give him confidence that the bull market in U.S.
stocks has not ended. "I think this business cycle expansion we
started in the middle of 2009, which is now about 62 months old,
should extend for another 3 years or longer and if that's the
case, it is simply too early in this business expansion for
shares to peak."
Einhorn added: "The market tends to peak roughly 6-8 months
prior to a peak in economic activity, so if I'm correct that
this particular economic expansion has years to go, then this
bull market should have a good deal of time and price left in
it."
As for Yellen, Einhorn said "The Fed has made it clear –
certainly reinforced yesterday by Janet Yellen and the FOMC –
that they will keep policy easy for an extended period of time,
that is keep the feds funds rate at or close to zero through at
least the middle to latter part of next year."
Einhorn joined Omega in 1999, after previously overseeing global
investment research and co-chairing the investment policy
committee at Goldman Sachs & Co. He is unrelated to David
Einhorn, who runs hedge fund firm Greenlight Capital LP.
(Reporting By Jennifer Ablan; Editing by Chizu Nomiyama)
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