Trump warns ‘rich guys’ could be talking down stock market to profit

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U.S. President Donald Trump speaks during a press briefing in the Rose Garden of the White House in Washington, D.C., on Monday, May 11, 2020.

Oliver Contreras | Sipa | Bloomberg via Getty Images

President Donald Trump pointed the finger at wealthy investors for supposedly manipulating the stock market by making strong statements. 

In a tweet Wednesday, Trump said to be wary of wealthy investors using their platform to comment negatively about stocks, when they tend to profit from betting against the market.

“When the so-called ‘rich guys’ speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down,” Trump tweeted. “Then they go positive, get big publicity, and make it going up. They get you both ways. Barely legal?”

While Trump didn’t specify whom he was referring to, his comments followed billionaire hedge fund manager Stanley Druckenmiller’s remarks Tuesday evening about the stock market being historically overvalued.

“The risk-reward for equity is maybe as bad as I’ve seen it in my career,” Druckemiller told the Economic Club of New York. “The wild card here is the Fed can always step up their (asset) purchases.”

Druckenmiller, chairman and CEO of the Duquesne Family Office, also said he thought the market was overreacting to news of progress on antiviral drugs, such as Gilead’s remdesivir.

The stock market has bounced back sharply from its March lows as investors have grown more hopeful about an eventual reopening of the economy. After tumbling into the fastest bear market ever two months ago, the S&P 500 has bounced more than 30% from that bottom and is now sitting about 13% below its record high from February.

Another big investor who has been outspoken about the market is Bill Ackman. The activist manager from Pershing Square made an appearance on CNBC on March 18, warning “hell is coming” and imploring the White House to shut down the country for a month.

Ackman turned a net profit of more than $2 billion a week following his TV interview. He then used those proceeds to wager that existing Pershing bets, including hotel operator Hilton Worldwide, would rebound. He called the idea that he tried to drive down the market through his comments “absurd.”

CNBC’s Jim Cramer shared similar sentiment as Trump, criticizing Ackman for betting against the market while being apocalyptic publicly.

“I’ve had it with these billionaires,” Cramer said Wednesday on CNBC’s “Squawk on the Street.”

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