Jim Bianco Warns Stocks Are Facing Stiff Competition As Cash Is No Longer Trash

The stock market is competing with conventional savings accounts.

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And for the first time in years, according to Wall Street forecaster Jim Bianco, the winner might be your local bank.

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According to him, investors now have safer options to make money thanks to higher interest rates.

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"Money is no longer garbage. The president of Bianco Research said on Wednesday's episode of "Fast Money" on Trade Algo that the statement was an outdated meme from two decades ago. "Cash may potentially be a partial replacement for the 2010s, when it was just a waste of time. That is no longer the case.

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He gives the example of the 6-month Treasury Note, which currently has a yield of more than 5%. Bianco predicts a quick increase to 6%.

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"Suck cash out of the stock market"

Bianco continued, "You will receive two-thirds of the stock market's long-term appreciation with zero risk." "That will make the stock market extremely competitive. That can drain funds from the stock market.

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His most recent remarks are in response to the recent Fed meeting minutes being released. The Fed stated that "ongoing" rate increases are required to contain inflation.

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Following the minutes, the Dow and S&P 500 finished lower, but the tech-heavy Nasdaq managed a little gain. The Dow is down for the year, and the S&P 500 is currently on a four-day losing run.

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Investors will need to begin considering the possibility that our globe has a 5% or 6% growth rate, according to Bianco.

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He thinks that in the upcoming months, inflation is unlikely to change much.

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"Many people are beginning to consider... The Fed will raise rates numerous times, according to Bianco, rather than just one more time. "For this reason, I believe the stock market is beginning to recognize it."