Jim Paulsen from The Leuthold Group stated that stocks will rise by at least 25% during a time where Wall Street is in constant fear of a recession.
The chief investment strategist at Leuthold predicts the S&P 500 will hit 5,000 in the coming 12 months, a far more bullish call than any provided by the strategists Bloomberg regularly surveys. Paulsen stated Thursday that investors are too focused on the Federal Reserve and the implications of its interest rate hikes. He also said that the economy is slowing.
“The lows are in, and I think we are starting a new bull market,” Paulsen said in a Bloomberg Television interview Thursday. “The Fed is not the only policy driver in the room. There are others and a lot of those have already started to ease.”
The yield on the 10-year Treasury is at an all-time low of around 3.3%, while the US Dollar has fallen almost 9% since peak-to-trough. mortgage rates The longest stretch of declines since May 2019 was the fourth week in succession.
While the Fed is expected to raise rates by another 50 basis points to curb inflation, the economy is slowing and Paulsen said, “they are going to have to be wrapping it up pretty soon.”
The average equity strategist forecasts a decline for the S&P 500 in 2023 as recent wage And services Data suggests that inflationary forces are still a major factor in the economy, increasing the chances of higher rates.
Wall Street watchers are sounding the alarm ahead of next week’s Fed policy meeting, warning that the outlook for the US economy in 2023 is grim. Top bank CEOs Goldman Sachs Group Inc.’s David Solomon to JPMorgan Chase & Co.’s Jamie Dimon recently shared their dire predictions of a possible recession.
“I don’t ever remember a time when the CEOs in this country are almost 100% universal that we are going to have a recession,” Paulsen said. “Usually, recessions are something that comes out of left field and surprises the market. That’s not going to happen here.”
Paulsen stated that he believes the US can avoid recession.
“There is too much pessimism,” he said. “Too much has already been discounted and that opens the door for a positive surprise and people have to catch up.”
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