Tepper has been cutting his stock-market holdings, says Wall Street in ‘late innings’

Billionaire David Tepper, one of Wall Street’s top all-time hedge-fund managers, on Thursday offered a less-than-bullish forecast for stocks, pointing to fears of clashes with China on trade and a bull market that is in its 10th year as cause for moderation.

“I’ve taken down my exposure,” said the head of Appaloosa Management, which manages around $14 billion, during an interview with CNBC Thursday. “Our whole book, we probably took down 30% at some point, the equity part,” he said.

“If you ask me what inning we’re in…I would say late innings,” he said. “But you know what happens with baseball sometimes? It goes into extra innings,” he said.

Previously, Tepper expressed more optimism about the stock market’s ability to put in fresh highs following corporate tax cuts put in place in December by President Donald Trump’s administration.

On Thursday, Treasury Secretary Steven Mnuchin invited top Beijing officials for further trade talks on trade, marking a potential detente between the two largest economic superpowers. However, fears that at tit-for-tat clash between the countries could still intensify has proven the biggest headwind for the market.

Worries on trade and expectations that the economy and market may not have much more room to run higher, before hitting a wall after a multiyear run has left Tepper more conservative.

Thus far in 2018, the Dow Jones Industrial Average DJIA, +0.50% is up 5.7%, while the S&P 500 SPX, +0.51%  has climbed 8.5%, and the Nasdaq Composite Index COMP, +0.82% has advanced by more than 16%.

Founded in 1993, Tepper’s fund has seen cumulative net gains from inception through the end of 2017 totaling $25.4 billion, according to LCH Investments, ranking it ninth on the all-time list.

The Appaloosa founder is known for the concentrated bets he made on the financial system during the 2007-09 financial crisis, when he correctly surmised that a backstop provided by the Federal Reserve would stem the bleeding in that sector, leading him to stellar gains.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.