"Big Short" investor Steve Eisman.CNBC"Big Short" investor Steve Eisman said he doesn't see any reason for investors to sell their stocks.
He said the 2023 stock rally will continue as long as the US economy stays as strong as it is.
"The Fed keeps raising rates; it hasn't had an impact. Until it has an impact, we'll keep chugging along," he said.
"Big Short" investor Steve Eisman said the sizzling stock market rally of 2023 can run on as long as the US economy stays strong.
"It's starting to feel a little manic. But it could go on for quite a bit longer because as long as the economic data is OK, I don't see why people are going to sell their stocks," Eisman said in a CNBC interview on Thursday.
Eisman was likely pointing to recent economic data that has suggested the US is in better shape than most Americans think.
Inflation is rapidly cooling, the job market has stayed robust with low unemployment, and sustained equity gains have helped push the S&P 500 into a bull market.
This year's stock rally has got a big boost from investor excitement over the rise of artificial intelligence, with investors piling into popular tech stocks like Apple, Microsoft and Nvidia.
"I would say I'm surprised by how much the market has gone up this year. I really am," Eisman said.
The equity market has stayed ebullient even as the Federal Reserve extended its interest-rate increases – which started in March 2022 – to a staggering 500 basis points in a bid to tame inflation.
"The data is still very, very strong. The Fed keeps raising rates; it hasn't had an impact. Until it has an impact, we'll keep chugging along," Eisman said.
Eisman said he's currently focusing investments in tech and infrastructure, while avoiding bank stocks following the turmoil that broke out in the financial sector earlier this year.
"The regionals are problematic because they keep losing their deposits and have to keep reducing their balance sheets. So, for the regionals, I don't think earnings have bottomed and I wouldn't even think about buying them until I thought that they had," he said, referring to US regional banks.
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