Billionaire Steve Cohen said the US economy may fall into a short-lived recession this year before rebounding in the first quarter of next year.
Cohen said this could take the form of a short-lived swoon, or “a fake scare,” that might catch people off guard temporarily before markets bounce back. “It’s only going to be short-term in nature,” Cohen said at the Robin Hood Investors Conference Wednesday, according to people familiar with the matter.
His $31.4 billion hedge fund, Point72 Asset Management is still “pretty positive” on the economy, Cohen said. He expects economic growth to jump next year and equity markets to rally 3% to 5%, prompting interest rates to rise “higher than people think,” Cohen said at the conference, which was closed to press.
Cohen has struck a more optimistic tone on the economy than some of his fellow billionaires. Paul Singer said last week that investors should be more worried than they appear to be, as the world is more perilous than markets are pricing in. Earlier this month Paul Tudor Jones said the US is in its weakest fiscal position since World War II and that he expects a recession in the first quarter of 2024.
Artificial Intelligence
The New York Mets owner also touched on artificial intelligence, saying while the technology isn’t yet “alpha-producing” for Point72, he’s “highly confident” his firm will be able to use it to create value.
Point72 has been incorporating machine learning into its quantitative investing business for years and recently has been experimenting with it in its equity unit, he said.
“It’s still early,” Cohen said. “It’s definitely going to be a productivity enhancer. We’re going to come up with lots of use cases and experiment and try to figure out what works and what doesn’t.”
Cohen also said about 60% of Point72’s assets are invested in human-run long and short equity bets and about 20% in computer-run wagers. The firm also has a small macro investing business.
On Tuesday, Millennium Management’s Izzy Englander told the Robin Hood audience he thinks AI is a tool but not a substitute, and that he’s doubtful asset management will be run by robots any time soon, Insider reported.