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June 10, 2022, 9:24 a.m. EDT

Stanley Druckenmiller fears a recession but isn’t betting against stocks. Here’s why.

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By Steve Goldstein

Sometimes, it’s hard getting workers of a certain generation to do much of anything at all.

Here’s one: “Currently, I’m going in every day, and I’m looking at my screen, but I’m pretty much taking a break.”

Granted, that’s not a woke 20-something but Stanley Druckenmiller, the 68-year-old investing legend who runs the Duquesne Family Office and managed money for George Soros. He has a reason for his inactivity.

“I’ve lived through enough bear markets, that if you get aggressive in a bear market on the short side, you can get your head ripped off in rallies,” he said, according to a clip from the 2022 Sohn Investment Conference that was aired on CNBC .

Druckenmiller said, according to Bloomberg News’ account , that it’s possible the first leg of the bear market has ended. “But I think it’s highly, highly probable that the bear market has a ways to run.” His rationale is simple enough — there has never been a soft landing when inflation has been above 4.5%.

At the end of the first quarter, his top positions were South Korean online marketplace Coupang /zigman2/quotes/225253473/composite CPNG -4.08% , Microsoft /zigman2/quotes/207732364/composite MSFT +0.53% , miner Freeport-McMoRan /zigman2/quotes/200215692/composite FCX -3.54% , Amazon.com /zigman2/quotes/210331248/composite AMZN -0.26% and Chevron /zigman2/quotes/205871374/composite CVX -1.90% , according to his 13-F filing. The Freeport-McMoRan and Chevron holdings fit with his comment that he has owned key commodities including oil, gold and copper this year, while betting against fixed income and stocks.

According to Bloomberg, Druckenmiller will look to bet against the dollar /zigman2/quotes/210598269/delayed DXY -0.02% sometime in the next six months, as he also expects to short stocks again.

The buzz

U.S. consumer price growth accelerated to 1% in May, the Labor Department reported on Friday, topping consensus expectations. Core price growth stayed at 0.6%. Over the last 12 months, prices have gained 8.6%, t he fastest inflation rate since 1981.

U.S. stock futures /zigman2/quotes/209948968/delayed ES00 -0.14% /zigman2/quotes/210219788/delayed NQ00 -0.15% slumped after the report was released, with the S&P 500 contract losing nearly 2%, while the yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -2.51% rose to 3.09%.

Shortly after the open, the University of Michigan’s consumer sentiment index is due for release.

Japan’s Ministry of Finance, the Bank of Japan and the Financial Services Agency on Friday expressed concern over the yen’s /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0038% recent rapid weakening.

Netflix /zigman2/quotes/202353025/composite NFLX -0.08% , Roblox /zigman2/quotes/223883423/composite RBLX -4.28% , and eBay /zigman2/quotes/204653455/composite EBAY -1.54% were among a host of internet stocks that Goldman Sachs has downgraded to sell. Netflix, eBay, and Frontdoor /zigman2/quotes/202976892/composite FTDR -0.69% , which also was downgraded, each fell 4%.

The U.K. Competition and Markets Authority said it is consulting on the launch of a probe into Apple /zigman2/quotes/202934861/composite AAPL +0.63% and Google’s /zigman2/quotes/202490156/composite GOOGL +0.33% market power in mobile browsers. Apple, the regulator said, has also blocked the emergence of cloud gaming services on its App Store, while the regulator is launching an enforcement action against Google for how users can make in-app payments.

DocuSign /zigman2/quotes/205992027/composite DOCU +2.03% shares slumped 26% in premarket action, as the electronic-documents company missed on fiscal first-quarter earnings and trimmed its billings guidance.

Top tickers

Here were the most active stock-market ticker symbols as of 6 a.m. Eastern.

Ticker Security name
/zigman2/quotes/203558040/composite TSLA Tesla
/zigman2/quotes/203755179/composite GME GameStop
/zigman2/quotes/200235402/composite AMC AMC Entertainment
/zigman2/quotes/204905836/composite NIO NIO
/zigman2/quotes/201948298/composite BABA Alibaba
/zigman2/quotes/210331248/composite AMZN Amazon.com
/zigman2/quotes/202934861/composite AAPL Apple
/zigman2/quotes/208144392/composite AMD Advanced Micro Devices
/zigman2/quotes/231059446/composite IMPP Imperial Petroleum
/zigman2/quotes/200467500/composite NVDA Nvidia

The chart

David Rosenberg, the veteran Wall Street strategist who has been pessimistic on markets for some time, is becoming a bit more positive. The founder of Rosenberg Research writes that the combination of euphoric sentiment, stretched positioning and excessive valuations are being unwound, although he expects the drawdown in stocks to continue. His equity model has improved to a level suggesting above-average returns of 13.8% over the next 12 months. “As such, for investors that started the year underweight U.S. stocks (as our model recommended), we believe it makes sense to increase exposure somewhat,” he says.

Random reads

Here’s a look at why it’s so expensive to make a nuclear power plant .

A relaunch of McDonald’s /zigman2/quotes/203508018/composite MCD +1.24% restaurants in Russia, under a new, as-yet undisclosed name, is set for Sunday.

Baby formula is one thing, but now there’s a looming shortage of Sriracha sauce .

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/zigman2/quotes/225253473/composite
US : U.S.: NYSE
$ 18.10
-0.77 -4.08%
Volume: 8.30M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$33.26 billion
Rev. per Employee
$292,293
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/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 293.47
+1.56 +0.53%
Volume: 18.09M
Aug. 15, 2022 4:00p
P/E Ratio
30.43
Dividend Yield
0.85%
Market Cap
$2177.03 billion
Rev. per Employee
$897,149
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/zigman2/quotes/200215692/composite
US : U.S.: NYSE
$ 30.50
-1.12 -3.54%
Volume: 16.05M
Aug. 15, 2022 4:03p
P/E Ratio
9.25
Dividend Yield
1.72%
Market Cap
$45.83 billion
Rev. per Employee
$998,826
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 143.18
-0.37 -0.26%
Volume: 39.01M
Aug. 15, 2022 4:00p
P/E Ratio
128.14
Dividend Yield
N/A
Market Cap
$1462.42 billion
Rev. per Employee
$302,178
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/zigman2/quotes/205871374/composite
US : U.S.: NYSE
$ 156.81
-3.04 -1.90%
Volume: 8.98M
Aug. 15, 2022 4:03p
P/E Ratio
10.48
Dividend Yield
3.62%
Market Cap
$314.08 billion
Rev. per Employee
$4.86M
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/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
106.52
-0.02 -0.02%
Volume: 0.00
Aug. 16, 2022 2:19a
loading...
/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 4,292.25
-6.00 -0.14%
Volume: 44,161
Aug. 16, 2022 1:19a
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/zigman2/quotes/210219788/delayed
US : U.S.: CME
$ 13,661.25
-20.00 -0.15%
Volume: 18,000
Aug. 16, 2022 1:19a
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/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.78
-0.07 -2.51%
Volume: 0.00
Aug. 16, 2022 2:29a
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/zigman2/quotes/210561789/realtime/sampled
US : Tullett Prebon
133.3240
+0.0050 +0.0038%
Volume: 0.0000
Aug. 16, 2022 2:29a
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/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 249.11
-0.19 -0.08%
Volume: 6.53M
Aug. 15, 2022 4:00p
P/E Ratio
22.15
Dividend Yield
N/A
Market Cap
$110.87 billion
Rev. per Employee
$2.75M
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/zigman2/quotes/223883423/composite
US : U.S.: NYSE
$ 48.96
-2.19 -4.28%
Volume: 17.19M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$30.34 billion
Rev. per Employee
N/A
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/zigman2/quotes/204653455/composite
US : U.S.: Nasdaq
$ 48.68
-0.76 -1.54%
Volume: 3.71M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
1.81%
Market Cap
$27.16 billion
Rev. per Employee
$928,056
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/zigman2/quotes/202976892/composite
US : U.S.: Nasdaq
$ 25.87
-0.18 -0.69%
Volume: 634,656
Aug. 15, 2022 4:00p
P/E Ratio
18.57
Dividend Yield
N/A
Market Cap
$2.12 billion
Rev. per Employee
$792,407
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 173.19
+1.09 +0.63%
Volume: 54.09M
Aug. 15, 2022 4:00p
P/E Ratio
28.62
Dividend Yield
0.53%
Market Cap
$2765.78 billion
Rev. per Employee
$2.52M
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/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 122.08
+0.40 +0.33%
Volume: 19.49M
Aug. 15, 2022 4:00p
P/E Ratio
22.72
Dividend Yield
N/A
Market Cap
$1593.44 billion
Rev. per Employee
$1.77M
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/zigman2/quotes/205992027/composite
US : U.S.: Nasdaq
$ 75.85
+1.51 +2.03%
Volume: 2.43M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$14.86 billion
Rev. per Employee
$298,462
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 927.96
+27.87 +3.10%
Volume: 29.79M
Aug. 15, 2022 4:00p
P/E Ratio
111.77
Dividend Yield
N/A
Market Cap
$940.14 billion
Rev. per Employee
$676,463
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/zigman2/quotes/203755179/composite
US : U.S.: NYSE
$ 39.68
-1.06 -2.60%
Volume: 5.24M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$12.41 billion
Rev. per Employee
$509,358
loading...
/zigman2/quotes/200235402/composite
US : U.S.: NYSE
$ 24.21
-0.23 -0.94%
Volume: 50.18M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$12.63 billion
Rev. per Employee
$124,591
loading...
/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 21.30
+0.19 +0.90%
Volume: 36.35M
Aug. 15, 2022 4:03p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.13 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 94.20
-0.57 -0.60%
Volume: 14.43M
Aug. 15, 2022 4:01p
P/E Ratio
51.91
Dividend Yield
N/A
Market Cap
$251.10 billion
Rev. per Employee
$518,515
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 143.18
-0.37 -0.26%
Volume: 39.01M
Aug. 15, 2022 4:00p
P/E Ratio
128.14
Dividend Yield
N/A
Market Cap
$1462.42 billion
Rev. per Employee
$302,178
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 173.19
+1.09 +0.63%
Volume: 54.09M
Aug. 15, 2022 4:00p
P/E Ratio
28.62
Dividend Yield
0.53%
Market Cap
$2765.78 billion
Rev. per Employee
$2.52M
loading...
/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 101.01
+0.18 +0.18%
Volume: 61.33M
Aug. 15, 2022 4:00p
P/E Ratio
42.46
Dividend Yield
N/A
Market Cap
$163.40 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/231059446/composite
US : U.S.: Nasdaq
$ 0.37
-0.0031 -0.84%
Volume: 6.83M
Aug. 15, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$70.17 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 190.32
+3.23 +1.73%
Volume: 45.77M
Aug. 15, 2022 4:00p
P/E Ratio
51.08
Dividend Yield
0.08%
Market Cap
$467.72 billion
Rev. per Employee
$1.31M
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/zigman2/quotes/203508018/composite
US : U.S.: NYSE
$ 265.44
+3.26 +1.24%
Volume: 2.34M
Aug. 15, 2022 4:00p
P/E Ratio
32.71
Dividend Yield
2.08%
Market Cap
$192.89 billion
Rev. per Employee
$117,972
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