'Big Short' Investor Steve Eisman Raises Red Flag On Rising Market Optimism: 'Everybody Is Coming Into The Year Feeling Too Good'

Renowned investor Steve Eisman has recently raised concerns about the bullish sentiments prevailing in the market in 2024.

What Happened: Eisman, who is famous for foreseeing the housing market crash of 2007-2008, suggested that the level of optimism among investors is alarmingly high, CNBC reported Tuesday.

The senior portfolio manager at Neuberger Berman pointed out that despite a lukewarm beginning to the year, the market seems overly bullish. He identified the excitement around the “Magnificent Seven” tech stocks and the expectation of several interest rate reductions as potential signs of overconfidence.

“Long term, I’m still very bullish. But near term I just worry that everybody is coming into the year feeling too good,” Eisman highlighted during his conversation with CNBC’s “Fast Money.”

Eisman further commented that if the number of rate hikes in 2024 falls short of expectations, it could act as a negative catalyst in the short term. The Federal Reserve has planned three rate cuts for this year, but Eisman thinks these expectations might be too aggressive.

Despite expressing these concerns, Eisman remains hopeful about certain sectors, particularly homebuilding stocks, due to their strong balance sheets and their capacity to offer lower rates to customers. However, his top picks for 2024 are in the realms of technology and infrastructure instead of housing.

Why It Matters: Eisman’s concerns are not new. Last year, in November, he announced his decision to refrain from buying bonds, attributing his caution to the uncertain economic stance of Federal Reserve Chairman Jerome Powell.

He has also previously sounded the alarm on a potential commercial real estate crisis in October.

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