Marc Faber Warns Of 20% Fall In US Stocks

According to an article on CNBC, the Street’s most influential strategist, Marc Faber, sounded an alarm on the next fall in the stock market. Dr Faber, who is famous for his “The Gloom Boom & Doom Report" and is popularly known as “Dr Doom,” is notorious for correctly identifying market trends. Faber expressed concerns regarding the way in which China has decided to slow down growth in its economy. He believes that a sharp reduction in lending by Chinese banks will pull down all those companies that soared during the recent boom in the country, including several US multi-nationals.

Marc Faber informed the Fast Money desk that he is not a buyer of Chinese stocks at this time. In response to Faber’s comments, Tim Seymour said that those investors who agree with Faber may want to short Aluminum Corp of China Ltd (NYSE: ACH), among other refineries in China.

According to Faber, deceleration in growth in China will lead to excess capacities, resulting in excess supply. He added further that "Industrial commodities have become quite vulnerable." Faber expects the Dow and S&P to slip 20% in the near term from the highs seen in January. He believes that the situation may worsen as developments unfold.

http://www.benzinga.com/media/cnbc