In a CNBC interview, Andrew Ross Sorkin sits down with Tudor Investments Founder & CIO Paul Tudor Jones on “Squawk Box” today. Following is a video clip of the interview on CNBC.com.
Paul Tudor Jones: Ingredients are in place for massive rally before a 'blow off' top to bull market
ANDREW ROSS SORKIN: Thanks Becky. Boy we got a lot of news going on. We're joined right now by legendary investor Paul Tudor Jones. He's the founder and CIO of Tudor Investment Corporation. Of course, the founder and board member at the Robin Hood Foundation. And we should mention that on October 15th, Robin Hood Foundation is hosting its 13th annual investor conference right here in New York City. And we'll talk about that. But a lot of headlines, you know, the Verizon guys, you know Shulman pretty well.
PAUL TUDOR JONES: Dan Shulman is chairman of Just Capital. So that's a great day for Dan a great day for corporate America a great day for America and capitalism.
SORKIN: So let me ask you about the markets though right now because we have all these big headlines, including today we have this OpenAI deal with AMD. AMD is ripping. There's these warrants. Some people look at these as sort of these circular deals we had two weeks ago, a similar deal with Nvidia. We've got a big bank deal this morning. We're going to hear from Fifth Third's CEO in just a little bit. You were, I think, dare I say, very pessimistic the last time I saw you here back in May. How do you feel now?
TUDOR JONES: Well, it it's like the Prince song. It's 1999 party like it's 1999, right? It feels exactly like 1999. I don't know whether we'll actually replay it exactly, but I think all the ingredients are in place, and certainly from a trading standpoint, you have to position yourself like it's October of 99. I don't see why you would do anything but that. And remember, the Nasdaq doubled between the first week of October 99th and March of 2000. So it looks like a duck and quacks like a duck. It's probably not a chicken, right?
SORKIN: But you think it's 99. And we were talking to Mike Novogratz earlier today. It's not 98. I mean everyone's in the it's either 98, 99, but it's not 96 I guess is the point. And that's that's a problem potentially.
TUDOR JONES: Right.
SORKIN: Or it's maybe an opportunity, but you have to get on and off the train pretty quick.
TUDOR JONES: Well, if you just think about bull markets, right. The greatest price appreciation is always the 12 months preceding the top. So that's the nature of a bull market. It kind of doubles whatever the annual average is. And before then. So if you don't play it, you're missing out on the juice. If you do play it, you get you have to have really happy feet because there will be a really, really bad end to it. And my guess is that I think all the ingredients are in place for some kind of a blow off. Will it happen again? History rhymes a lot, so I would think some version of it is going to happen again. If anything, now is so much more potentially explosive than 1999 1999. We were looking at a rate hike in November. Now we're looking at a rate cut. We were looking at four more rate hikes before we actually topped in 2000. Now we're looking at four rate well, 3 of 4 rate cuts probably at least. So you have monetary policy that's going to take us to real rates of zero or less, probably depending upon the next fed chair. And then the big difference is obviously fiscal policy. We had a budget surplus in 99 2000. Now we've got a 6% budget deficit. So that combination, that fiscal monetary combination is a brew that we haven't seen since, I guess the postwar period, early 50s, something like that. And that was crazy times, right? Coming out of the war.
SORKIN: You think that most people who are watching us now, you to be in this market now. But then the question, as I said, is you have to jump off the train before the train crashes. If you're suggesting the train is going to crash.
TUDOR JONES: I’m not suggesting that the train is going to crash I'm suggesting that we're in a period that's conducive for massive price appreciation in a variety of assets. Will it happen or not? I don't know, there's if you kind of just look, if you just think about the leverage that we had in 1999, you look at margin debt and then you look at today margin debt. But you have to throw in leverage ETFs because people don't use margin like they did back then. We're probably a little more elevated than we were in October of 99. It will take a speculative frenzy for us to elevate those prices. Right. It will take more retail buying. It will take more recruitment from a variety of other, from long short hedge funds, from real money, etc. it'll take a combination of those things. It's not going to go up without flows and without a story. The story is there. It's the combination of the most unique and aggressive fiscal and monetary conditions that we've ever seen.
SORKIN: Okay, if you're right, who are the winners then in that and who are the losers? Because right now we're looking at an Nvidia obviously being a major winner. Even AMD today major winner. But there's this unique arrangement that's almost circular.
TUDOR JONES: Yeah the circularity makes me nervous I would say. And I'm going to think of it in broad terms. I think what the markets are telling you, this is an inflation story down the road. If you look at the biggest winners, right, the biggest winners are gold. I think it's up 46, 47%. Bitcoin I want to say it's up 50 or 60. I'm not even sure there's a Morgan Stanley basket that's a retail flow basket that has all the meme stocks in it. It's up 67, 68%. So it's really what retail jumps on. So crypto digital gold. That's obviously something that's very very appealing.
SORKIN: Does that mean you're jumping on all of that right now.
TUDOR JONES: Well I'd want to have positions in all of it for sure. So if you said to me what are they going to be the winners. Yeah. Again, we have this race, right. The race realistically is certainly to the end of the year because that's when everyone marks institutionally. And then you have to figure out what's going to go on in next year. So what would I want to have? I'd want to have a combination of gold, crypto, probably the Nasdaq. I think I want to say that I've said that before, and I think that's still the right one. And I think whatever the fastest horse is at this point in time probably has a good chance of being that on Dec 31.
SORKIN: Okay. Let me ask you though about this. So I said that you were pessimistic the last time I saw you. This was May 6th, 2025. So just what, a couple months ago you said for me, it's pretty clear this is back in May. You have Trump who's locked in tariffs. You have the fed who's locked in not cutting rates. That is not good for the stock market will probably go down to new lows. Even when Trump dials back China to 50%.
TUDOR JONES: Correct. That was really wrong wasn't it?
SORKIN: Well, I'm curious what you of that now. And what do you think you got wrong?
TUDOR JONES: At that point in time, the stock market was still on the way back up. It was still flirting with the 200 day moving average. I am really simple. The one thing that I've learned in my job is humility. How often we are wrong. So I'm going to always use as my standard bearer the 200 moving day average. I'll give you a great example. Take the 200 day moving average in the US stock market when we have easy conditions right now and US stocks and the fed is easing, the stock market on average doubles its return above the 200 day moving average when it's below the 200 day moving average, which I think it was at that point in time. And you're easing and or tightening, you have returns that are in single digits. So momentum. Price momentum is extraordinarily important to whatever you're trading. Slash investment thesis is nothing good ever happens under the 200 day moving average in any asset so when the market changes I am going to change with it simple right.
SORKIN: What do you think of the bond market right now? I mean, are you surprised how complacent it seems to be relative to what seems like a lot of volatility, if you will, in Washington?
TUDOR JONES: So so I've consistently believed that the biggest bubble that we have is in sovereign debt. And a great question, one that I thought you would have asked me rather than that one, is why have we not had a blow up in the bond market? And of course, the reason for that is that now that we've embarked on.
SORKIN: this was the nicer cousin of that question.
TUDOR JONES: Yes. The reason for that is because with the easing cycle, you've brought in a whole bunch of flows attendant with that, we've taken asset managers $500 billion overweight, so we've pulled forward all that demand in anticipation of this easing cycle. Right. So we've pulled that forward. That's just one example. You've pulled in mutual fund and retail flows. So this easing cycle has delayed but certainly not ended. What inevitably is going to be a huge problem with sovereign debt somewhere down.
SORkIN: What is the tipping point for that then? Because there was always been this view that the bond vigilantes would hold Washington in check.
TUDOR JONES: I think they ultimately will. I mean, again, I think it's been delayed. I don't think we just think about this year. You've had elections in India, Korea, Germany, let this weekend in Japan, every one of those, every single one of those elections were for pro-growth candidates. Every single one of those countries are expanding their budget deficits.
It is wild that we continue to go ahead. And I think probably England is the only place because they actually have budget rules where you're going to experiment with austerity. Every other place, we're going to grow our way out of the problem. And so I feel it's a bit like I feel it's a bit like Star Trek. We're kind of boldly going where no man has ever gone before. And that's that's where I feel like we're doing in sovereign debt markets. And of course, when you're going to see it manifest itself, a problem is going to be at the end of this easing cycle when all that demand has been pushed forward. If you look at the amount of debt that's going to be required to be financed next year, which is with the AI build out, it's going to even go up once you add the corporate line item on top of the sovereign line item. You're still looking at a huge increase in supply of debt, much larger than I think the market could handle in normal times. But again, we're in an easing cycle. So we continue to bring in these flows. And when that easing cycle ends a year from now—yeah, probably a year from now—it's going to be really interesting to see how the bond markets do at that point in time.
SORKIN: All of these conversations we're having right now, you're about to have in a very big way with some really interesting investors in about a week from now. What's on tap?
TUDOR JONES: So in our investor conference we have a hell of a lineup. We've got Jamie Dimon and Ken Griffin. I'm going to interview Dario Mody. I'm so excited about that one. That one's the one that on a personal level, I have the greatest interest in, because I think of the tech titans, he's the most honest, the most transparent, and I want to get him to update his views on what he thinks the actual displacement will be in employment. Remember, he's used a number anywhere from 5 to 20%. So I'm really interested in hearing him talk about that. If I think about AI, that also, again, much like Star Trek, we're boldly going where no man has ever gone before. The only difference is we don't have Captain James Tiberius Kirk, right, leading the ship. We have no one leading the ship. We don't have science officer Spock to bring in logic and reason. The few people that bring that in get run over by those that are, "You—we can't have any regulation. Of course, if we stop that, then we're going to stop. We're going to stop the progress of artificial intelligence.”
And it's really interesting because we just did a poll with the American public. And so 83% of the American public thinks AI will be a net social positive, which is great. I believe that, there's no question. It's so fascinating because it's a two-phase phenomenon, right? You have so many fantastic things that are going to come from it, but then you also got these incredible threats. So you're constantly torn between the good and the bad side of AI. What I wish from those like Dario would be to not just acknowledge the fact that we also have threats that come from AI, but to actually begin to think about how society is going to deal with those. Because we know it's going to bring these wonderful things, and that's fantastic. But it's also potentially going to bring job displacement. We're going to have higher electric bills for a whole variety of people, environmental concerns.
And then of course you have the safety issues. So we've just done some great polling at Just Capital. And it's so Interesting because if you ask the American public what they think AI should be spending, for instance, on AI safety—right now, companies spend a quarter of 1% of total spend on AI safety. The American public thinks that number should be 5% or greater. So again, there's an interesting dialog to be continued on that, and hopefully we'll see some more rational thinking with regard to how we should be managing this fantastic product in a way that benefits society in the greatest way.
SORKIN: It sounds like we're going to have—it's all going to come at the same time. We're going to have the employment issues that you're talking about. At the same time, we might even have a little bit of a bust in the boom cycle.
TUDOR JONES: Again, history rhymes a lot. Who knows exactly how that's going to play out. It is a very combustible situation from an investing standpoint. And it's also going to be the one thing we know about the AI boom: there's going to be some huge winners, some huge losers. It's like every great technology, right?
SORKIN: But that's the question. Do you invest? Do you say Nvidia, AMD—the big guys are all the winners? Look, Amazon was a winner. Pets.com was a loser. Was that obvious to you?
TUDOR JONES: Well, you just—what you knew at that time with—and again, what you knew at that time is at some point in time, there was going to be an end of the cycle because inflation, a variety of other things. We're in this really crazy situation where we're looking at eight months from now, we're going to have a new Fed chair who probably is going to have rates, depending upon who they choose, somewhere between 2 and 3% Fed funds at 2 and 3% negative real rates with a 6% budget deficit.
SORKIN:Right.
TUDOR JONES: You wrote 1929. You tell me what's going to happen.
SORKIN: It's a longer conversation. I know I'm genuinely concerned, and I think—but I think the question is how much leverage is in the system. That to me is the fundamental issue. Every crisis is a function of too much leverage in the system
TUDOR JONES: Okay, so where we are right now, if I'm just thinking the stock market—kind of 1999, it was around 1.7% of market cap was margin debt. Today you've got to throw in levered ETFs, right? Because you can't—margin debt really doesn't have the same function it had 25–26 years ago. You throw that in. We're probably starting at about 2.2%. It added 1% of market cap at the top in 2000. My guess is we'll exceed that. But again, you need to be looking at some combination of levered ETFs, margin debt—those things. That will be, I think, a great way of measuring the pulse of what speculative frenzy may come.
SORKIN: Well, we will see. Congratulations on the upcoming event. Thank you for joining us this morning.
TUDOR JONES: Thank you so much. It's always wonderful being here—and go Robinhood. We have to help the least among us, and particularly the people that watch this, that profit from it, have a responsibility to do so.
