Appaloosa Management’s David Tepper: It’s very difficult to be bearish on stocks

David Tepper, the billionaire founder of Appaloosa Management, has said that it is a very difficult to be bearish on stocks right now. In a statement to CNBC’s Joe Kernen, Tepper also said he thinks the sell-off in treasuries that has driven rates higher is likely over.

“Basically I think rates have temporarily made the most of the move and should be more stable in the next few months,” Tepper said.

The sharp sell-off in bonds and subsequent rise in yields amid expectations of higher inflation on the horizon has weighed on stocks in recent weeks, particularly the technology sector. The NASDAQ has fallen for three consecutive weeks, its worst run since August and September last year.

Tepper said he thinks Japan could become a net buyer of U.S. treasuries following the jump in yields, which could help stabilise the market. Japan has been a net sell of US treasuries for years.

The United States 10-Year yield has been on a surge recently, jumping from around 0.9% at the beginning of the year to above 1.62% this month. Tepper believes that rates will stabilise and expects a rough yield range of 1.3%-1.7%, which “makes it safer to be in stocks for now”.
Stimulus plan
Over the weekend, the Senate passed the $1.9tln stimulus package, with minor amendments. The bill will now return to the House who are expected to vote on the amended bill on Tuesday. The bill should not have any issues getting through the House and is expected to be signed into law by President Biden by the end of the week.

Tepper believes the passage of the stimulus bill will be another bullish catalyst for stocks.

US markets have opened mixed on Monday. The Dow Jones Industrial Average is higher and trades just 1% from its all-time high. The S&P 500 is relatively flat and is just 2% from its all-time high. The NASDAQ 100 fell over 0.5% and underperformed again as tech stocks remain under pressure.