Thomas Peterffy, the chairman and founder of Interactive Brokers Group, thinks the S&P 500 index could decline nearly 20% from Wednesday’s level to bottom at around 3,000.
“‘I generally believe that rates are going to continue to go higher and inflation is not going to come down as much as expected.’”
The S&P 500 SPX, -0.67% is down 22.2% year to date. The large-cap index closed at its lowest level since November 2020 on Oct.12 this year. The stock market then staged a massive turnaround, with the Dow Jones Industrial Average DJIA, -0.33% posting the largest one day percentage gain since November 2020, after dropping nearly 550 points at its session low.
“Both interest rates and inflation rates will settle down between 4% and 5%, and we are going to go into a stagflation in the economy,” Peterffy told CNBC’s “Squawk Box” on Wednesday.The consumer-price index increased 0.4% in September, higher than the 0.3% consensus forecast polled by Dow Jones. Excluding volatile food and energy prices, the core CPI is even more worrisome, jumping a sharp 0.6% against the estimate of a 0.4% increase.
Interactive Brokers IBKR, +6.91% reported its third quarter adjusted earnings which surpassed consensus EPS estimates. The electronic broker reported adjusted earnings of $1.08 per share, compared to FactSet’s estimate of 96 cents, while the adjusted came in at $847 million, compared to the consensus of $797 million.
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