Legendary investor Stanley Druckenmiller says he doesn’t like the way the market is set up

Hedge fund manager Stanley Druckenmiller told the Economic Club of New York on Tuesday that stock market is historically overvalued.

“The risk-reward for equity is maybe as bad as I’ve seen it in my career,” Druckemiller said, according to the organization’s Twitter account. “The wild card here is the Fed can always step up their (asset) purchases.”

Stocks dropped dramatically in March as the coronavirus pandemic spread around the world, grinding many economic sectors to a halt. The major United States indexes have since rallied and recouped many of their losses, with the tech-heavy Nasdaq now positive for the year. 

The bounce back came amid unprecedented actions by the Federal Reserve, which began buying exchange traded funds of corporate bonds on Tuesday in its latest move to shore up the credit markets. 

The hedge fund manager also said he thought the market was overreacting to news of progress on antiviral drugs, such as Gilead’s remdesivir.

“I don’t see why anybody would change their behavior because there’s a viral drug out there,” he said, according the club.

Druckenmiller, who is the chairman and CEO of the Duquesne Family Office, was bullish on the market prior to the pandemic, telling CNBC’s Joe Kernen in January that he was confident in the Fed’s plans to keep interest rates low and thought Donald Trump’s re-election chances were improving, both of which he viewed as positives for stocks.