Stock market forecasts darkenGrantham, Siegel, Wilson

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Market experts including Marko Kolanovic, Jeremy Siegel and Lisa Shalett have warned that US stocks are entering a dangerous zone. Banking turmoil and recession risk have boosted some of the market’s recent downbeat forecasts. Here is a selection of the most recent stock market forecasts from investors, analysts and other top experts. Something is loading.

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US stocks have posted impressive gains so far in 2023 despite banking chaos and growing economic pessimism, surprising forecasters who held bearish views at the start of the year.

And now, with the second quarter underway, experts are once again taking stock of the situation and updating their forecasts to take into account a host of emerging risks – from a credit crunch and commercial real estate risks to the continued nervousness in the financial sector and the imminent risk of recession.

JPMorgan’s Marko Kolanovic, Morgan Stanley’s Lisa Shalett and FS Investments’ Troy Gayeski are among those who have warned that US stocks are now entering a dangerous zone, while Ed Yardeni thinks there is too much pessimism about economy.

Here is a selection of the most recent stock market forecasts from investors, analysts and other top experts.

Jeremy Grantham, seasoned investor

The S&P 500 is expected to plunge between 27% and 52% from its current level of 4,130 points, Grantham said in a recent interview.

“The best we can hope for is that this market would grow to around 3,000,” he said. “The worst we should fear is more like 2,000.”

Knowing that might sound extreme, Grantham noted that the benchmark index hit 666 points in 2009, meaning that if it bottoms out at 2,000 points this time around, it will still have tripled over the course of 2009. of the past 14 years.

Troy Gayeski, Chief Market Strategist at FS Investments

The stock market is heading for a sharp setback that could see the S&P 500 plunge around 22% over the next few quarters, and investors should start selling their holdings immediately, according to the chief market strategist at FS Investments.

“There’s no reason to wait. It’s not like you’re going to leave 10% more on the table,” Gayeski said during a recent episode of the “What Goes Up” podcast. “This is a golden opportunity to use this bear market rally to de-risk ahead of potentially very painful losses over the next six, nine, 12 months.”

Marko Kolanovic, Chief Market Strategist at JPMorgan

The stock market is underestimating the risk of an economic slowdown this year and even a mild recession would send stocks down 15% or more from current levels, according to JPMorgan.

“In contrast, even a mild recession would warrant retesting previous lows and result in a decline of more than 15%,” the strategists led by Kolanovic wrote in an April 17 note. “We are therefore maintaining a defensive bias in our model portfolio this month, unchanged from last month, with an underweight in equities and an overweight in cash.”

Jeremy Siegel, professor at Wharton

Banking turmoil threatens the wider economy and stocks are on course to crash in the coming weeks, Siegel warned in his WisdomTree commentary this week. The author of ‘Stocks for the Long Run’ warned that the market could be approaching a peak if investors follow the famous investing adage and ‘sell in May and walk away’.

“I can see additional short-term pressure,” he wrote. “For now, it remains prudent to have a cautious short-term outlook on equities, but I’m still very optimistic over the longer term.”

Lisa Shalett, Chief Investment Officer (Wealth Management) at Morgan Stanley

“The bearish rally in equities continues, but most of the good news about Federal Reserve rate hikes, lower headline inflation and lower real interest rates has been ignored,” he said. she writes in a Monday note.

“With a lot of optimism built in, particularly around the sustainability of low interest rates that support extreme valuations, we are entering a dangerous phase.”

Mike Wilson, Chief US Equity Strategist, Morgan Stanley

Investors are heading for disappointment amid the ongoing stock market rally as earnings expectations are too optimistic, according to Wilson.

“If there’s one thing that can throw cold water on the great mega-cap rally, it’s higher yields due to a Fed that can’t stop climbing as soon as maybe some investors expect it… We think the recent collapse in magnitude is the market’s way of warning us that we are far from off the hook in this bear market.”

Ed Yardeni, President, Yardeni Research

Of course, not everyone is pessimistic about stock markets.

Investors could miss out on potential gains in the stock market if they get too wary of the U.S. economy, which should head off an outright recession, Yardeni said as the S&P 500 edged closer to a bull market .

“I’ve been on the bull side, especially in late October…I thought there was way too much pessimism…in some of these market sentiment surveys, about as much pessimism as March 2009. And sure, things sure aren’t that bad,” he told CNBC on Monday.

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