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Published: April 17, 2020 at 4:35 p.m. ET, By Mark DeCambre<\/p>\n
\n\u2018Our gut tells us that a 50% or deeper decline from the February top might be the ultimate path of global stock markets.\u2019\u2014 Elliott Management\n<\/p><\/blockquote>\n
That\u2019s Paul Singer\u2019s Elliott Management offering a relatively dire warning in a recent letter to his clients.<\/p>\n
The billionaire hedge-fund manager and activist investor, whose net worth is $3.5 billion, according to Forbes<\/a>, says that America could be facing the deepest recession since the Great Depression.<\/p>\n
Reuters reported<\/a> that the activist investor, who manages some $40.4 billion, issued a Wednesday letter to investors that offered a grim outlook for the economy and recommended purchasing gold, even as a number of countries attempt to lift strict stay-at-home measures intended to slow down the spread of COVID-19, the disease derived from the novel strain of coronavirus that was first identified in Wuhan, China in December.<\/p>\n
Check out: The next 45 days are the \u2018most critical period in U.S. financial history,\u2019 says stock-market expert who profited in 1987 and 2008 crises<\/a><\/p>\n
The deadly illness has infected nearly 2.2 million people and claimed more than 146,000 lives globally, according to data compiled by Johns Hopkins University<\/a>.<\/p>\n
The comments from Singer\u2019s hedge fund, which was founded in 1977, comes as investors appear heartened by some signs of progress in a drug to treat COVID-19 and guidelines issued by President Donald Trump to reopen the economy in the near future.<\/p>\n
The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index have all gained more than 20% from their late-March bear-market lows, after sinking by more than 20% from their all-time closing high. On Friday, the market was gaining further traction higher<\/a>.<\/p>\n
Singer is an acclaimed investor on Wall Street and presciently warned his employees back on Feb. 1 to prepare for a months long quarantine<\/a>. He was quoted by Bloomberg News as saying in an internal memo that the spread of the viral outbreak raises significant \u201cuncertainty as to when its geometric growth will level off.\u201d<\/p>\n
The hedge-fund investor has been preparing for calamity for years. Three years ago<\/a> he warned the global financial system was in bad shape and investors were facing the possibility of a big market drop and raised a $5 billion rainy-day fund in preparation for what he described as \u201call hell\u201d to break out.<\/p>\n