Leon Cooperman sees stock market lower a year from now due to tax, rate, inflation pressures

Leon Cooperman at the 2019 Delivering Alpa conference in New York on Sept. 19. 2019.

Adam Jeffery | CNBC

Billionaire investor Leon Cooperman told CNBC on Friday he expects the stock market will be lower than current levels one year from now.

Cooperman’s comments came one day after the S&P 500 notched yet another record close in 2021, finishing Thursday’s session at 4,211.47. The broad equity index has risen roughly 12% year to date and about 43% in the past 12 months.

“Let’s face it. The market is facing the fact that taxes are going up, interest rates are going up, and inflation is going up. And we have a reasonably richly appraised market. So cyclically I’m engaged. But I got an eye on the exit,” Cooperman said in an interview on “Squawk Box.”

“I suspect the market will be lower a year from today. But I don’t have to make that guess now. This is not going to end well,” the chairman of the Omega Family Office added. “But nobody, myself included knows when this is going to end. We just watch the things that would normally indicated an end.”

Cooperman said he considers himself to be “a fully invested bear,” while acknowledging the market has lately “done better than I would’ve thought.”

“I don’t see the conditions that would lead to a significant market decline present,” Cooperman said. “However, however — this is the big however — I think we should recognize we’re pulling demand forward and that the longer-term outlook is not particularly favorable, in my view.”

Cooperman said his outlook on potential inflation is different than that of Federal Reserve Chairman Jerome Powell. The central banker has repeatedly said he expects inflation to be “transitory” as the economy recovers from the Covid pandemic, while stressing that the Fed’s policy will remain accommodative.  

“I think that Mr. Powell will be surprised by inflation. It’s not going to be as quiescent and transitory as he thinks. I think the Fed will be forced to say something before the end of 2022,” Cooperman said.

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