New Constructs Value in 60 Seconds: Which stocks will suffer the most

23 Jun 2023 · 1 min

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David Trainer identifies which stocks face the biggest risk from tightening liquidity. Zombie companies and weak firms with short runways will suffer most, as the Federal Reserve's pressure squeezes those that can't survive without easy money. Bed Bath & Beyond's collapse shows what happens when the credit dries up.

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There will be certain stocks that will absolutely be crushed. Zombie stocks will probably end up at zero. It's not necessarily happening overnight, but we see that the runway is getting shorter all the time. It's happening in front of our eyes. Bed Bath Beyond finally jumped the shark. Others are going to as the liquidity tightness remains. The Fed's not out there chopping off heads, and they're not necessarily pushing people over the ledge with a noose around their neck, but they kind of put the noose out there and it's up to these companies to figure out how to get out of that noose. And a lot of those companies are just never going to be able to.