Market Overview

Marc Faber: Market Overbought; Homebuilders, Tech Could Lead Stocks Lower

Related SPY
S&P 500 Index Futures Resume Rally
Michael Willis Talks S&P Buybacks And An Inflated Market
Stock Investors Bask In The Economic Slowdown's Glow (Seeking Alpha)
Related GLD
Bullish Leveraged Gold Miners ETFs Are On Fire
The Palladium ETF Is The Ultimate Volkswagen Victor
7 Best ETFs To Buy And Hold For The Next Decade From 7 Investment Strategists (Seeking Alpha)

Marc Faber, editor of the Gloom, Boom and Doom Report told CNBC's Maria Bartiromo on Tuesday that he was reducing his exposure to equities. Faber said that the market was "overbought."

Still, he admitted that the market might continue to rally this year, but even if it did, he foresaw a "'87 moment" wherein the market could plunge by as much as 40 percent in the second half of the year.

Faber said he was reducing his US equity exposure because he thought market "euphoria" was building up. "Markets move up and down," Faber said.

Geopolitically, Faber thought there could be continued issues in the Middle East, a region he described as a "boiling point" and thought that corporate profits could drop as companies face declining revenues and the inability to cut costs further.

Faber continues to like gold, saying that he owns the yellow metal because he is "fearful of systemic crises, wars and so forth."

He thought that Ukranian and Chinese stocks were cheap on a "relative" basis. In the US, he thought that mining and resource companies were not particularly expensive and, though he was a bull on homebuilding stocks in 2012, thought they had outrun their fundamentals. Faber warned that tech could continue to be vulnerable.

Posted-In: Marc FaberCNBC News Movers & Shakers Media Trading Ideas General


Related Articles (GLD + SPY)

View Comments and Join the Discussion!

Get Benzinga's Newsletters