Steve Eisman of “The Big Short” fame said Thursday that the stock market rally can carry on as long as the economy stays healthy. “This is the most anticipated recession that so far has never happened, so people are chasing it,” Eisman, senior portfolio manager at Neuberger Berman, said on CNBC’s ” Fast Money .” “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.” The market ended the first half of the year with flying colors, and it just got another boost this week from softer-than-expected inflation data. The S & P 500 popped 2.5% this week, pushing its 2023 gains to 17.5%. The equity benchmark had scored its best first half since 2019. The latest inflation reading could give the Federal Reserve some breathing room as it looks to bring down inflation that hit around 9% on an annualized basis in June 2022, the highest since the early 1980s. “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 shot to fame by betting against subprime mortgage loans before the 2008 financial crisis, as chronicled in Michael Lewis’ “The Big Short” and the subsequent Oscar-winning movie based on the book. In terms of sector and industry exposure, the investor said he’s avoiding mid-cap banks and regional lenders. “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,” Eisman said. The widely-followed investor also revealed that he’s betting on “greenification,” or companies involved in solar panels, grid improvement and industrials. He didn’t name specific stocks.
