Paul Tudor Jones Says He'll Be Short All of 2027, Citing Record Stock Issuance and Deficit Risk

Paul Tudor Jones is telling investors to brace for next year, and he's putting his own money behind it.

"2027 is going to be really, really challenging for the stock market," the founder and chief investment officer of Tudor Investment told CNBC's "Squawk Box" on Tuesday, Oct. 13. "You've probably got the most negative flow picture for the U.S. stock market that we've had, say, since 2002."

His position: "I'll be short the whole year. There just, there's little value."

The supply problem

Jones said corporate buybacks and mergers and acquisitions have been a tailwind for most of this four-year bull market because they shrank the number of shares available. That is now reversing.

He pointed to large offerings expected from Anthropic and OpenAI, and one that just finished for SpaceX. He also expects more secondary offerings from companies raising cash for AI buildouts.

The numbers back up the scale of the issuance. Goldman Sachs says U.S. companies have already raised $431 billion in 2026 through public offerings, follow-ons, convertible bonds and SPACs. The bank expects the final total could hit $675 billion, which would top the previous peak from the 2021 market mania.

The SpaceX IPO and SK Hynix's U.S. offering are among the deals driving that total, and Anthropic is expected to list.

Jones also flagged lockup expirations. Some SpaceX pre-IPO holders are obligated to hold their shares for a minimum term before they can sell. He expects many of them to want to diversify quickly once they can, given the uncertainty caused by rapidly advancing AI capabilities. "I think you'll see a lot of that stock being sold," he said.

The 1999 comparison

Jones repeated that today's market resembles 1999, roughly a year before the dot-com bubble burst. He said the market has split between companies benefiting from the AI boom and those that aren't.

His historical parallel is specific. "You had all this issuance, all these IPOs in '98 and '99, and really 2000, 2001, 2002," he said. "Those were the easiest years to be short because you kept having these unlocks that just kept adding supply to the market."

He has made this kind of warning before. Over the past couple of years he has repeatedly warned that the AI trade might end badly in a "blow-off top" followed by a crash. The market has kept climbing in the meantime, and the S&P 500 has more than doubled since this bull market began. Back in May, Jones disclosed that he had bought more AI-linked equities even as he watched for parallels from prior technology cycles.

Jones doesn't believe the peak has arrived just yet. He said the fourth quarter has a reputation for being strong for stocks. "Are we going to get the fourth-quarter run for the roses?" he said. "After the midterms, maybe Anthropic comes, will we get the craziness that we typically see in December and January?"

Deficits and the bond market

Jones's second concern is federal borrowing. "We're never going to fix these deficits until the market makes us do it," he said, comparing the eventual moment to 2008 and TARP. "No politician is going to voluntarily raise taxes or cut spending. They're going to be forced to."

He put odds on it. "If you put a gun to my head, I'd say 60-40, we're down that path."

That worry sits alongside what investors are already weighing: mounting inflation, higher bond yields and a more hawkish Federal Reserve.

Oil

Jones said he is long oil and expects it to rally another $20 to $25 a barrel after the midterms. "I am long oil... bullish oil," he said. If that happens, he said, "the equity market would absolutely, totally hate it."

West Texas Intermediate futures traded around $92.50 on Tuesday morning. Adding $20 to $25 would put it above the 2026 closing high of just under $113.

Oil has been volatile since the U.S.-Iran war began Feb. 28. Prices climbed in March, peaked in early April, fell below $70 in June, then recovered from July as the status of the Strait of Hormuz remained unclear. They approached $106 in September before easing.

The stock market has absorbed oil shocks this year better than expected. The S&P 500 fell just over 7% at its low in late March, a smaller drop than analysts had projected given the oil surge.

Jones tied the timing to the calendar. "If something to ameliorate the situation was going to happen, it would have happened already before the midterms," he said. He added that he assumes President Trump "has a plan post-election" because the current situation is "untenable," and he believes Trump will seek peace after voters cast their ballots.

What to watch

Jones's call is a forecast, not an event, and he is a disclosed participant in the trades he describes: short equities, long oil. His 1999 analogy has been wrong on timing for some time.

The near-term tests are concrete. Goldman's $675 billion full-year issuance projection will show whether 2026 sets a record. Anthropic's expected listing and the offerings Jones anticipates from OpenAI are still ahead. SpaceX's lockup schedule will show how much pre-IPO stock hits the market. After the November midterms, Jones's oil call will be tested too.