Here’s the One Thing That Could Trigger ‘Very Big Correction’ for Stock Market, According to ‘Big Short’ Investor Steve Eisman

Investor Steve Eisman, who took short positions against the housing market leading up to the 2008 crisis, is sounding the alarm over an event that could trigger a collapse in the stock market.

In a new video on his own YouTube channel, Eisman says that he continues to be long-term bullish on the US stock market, noting that the US economy is in the best position to witness growth and innovation in decades.

But Eisman cautions that escalating geopolitical tensions could obliterate the US economy’s growth potential, sparking a big stock market sell-off.

“We’ve been in a bull market pretty much for the last 10 years with some fits and starts. And so buy the dip has become almost a religion. It’s a religion that right now I largely subscribe to because I am of the view… that the US economy is more dynamic than it’s ever been in my lifetime. So long term, I am very bullish. 

However, the one thing that I worry about is the potential trade war. And here, it’s in no one’s interest for there to be a trade war. But just like in World War I, it was in no one’s interest for there to be a World War I. But because of the reciprocal treaties that countries had, they fell into it. 

I think it’s still possible that there’s a trade war. I don’t know how to handicap it. That is really the only risk in the market. 

As long as there’s no trade war, I’d buy every single dip. If there is a trade war, however, you would see a very big correction.” 

As of Friday’s close, the S&P 500 is trading at a new all-time high of 6,173 points.

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