Jim Paulsen of The Luthold Group said stocks could rise at least 25% over the next year, at a time when almost all of Wall Street is on the defensive against a recession.
The chief investment strategist at Leuthold predicts the S&P 500 will hit 5,000 in the coming 12 months, which is as good a call as any given by Bloomberg’s regular surveys. Investors are increasingly focused on the Federal Reserve and the impact of its interest rate hikes, Paulsen said in a Bloomberg Television interview on Thursday as the economy slows.
“There are lows, and I think we’re starting a new bull market,” Paulson said in a Bloomberg Television interview Thursday. “The central bank is not the only policy driver in the room. There are others, many of which have already started easing.
The 10-year Treasury yield is at a three-month low, while the U.S. dollar has fallen nearly 9% from its peak to trough. Mortgage rates It fell for the fourth week in a row, the longest decline since May 2019.
Although the Fed is expected to raise rates by another 50 basis points to control inflation, the economy is slowing and Paulsen said, “They need to get it done soon.”
The average stock strategist predicts a Decline The latest for the S&P 500 is 2023 Wages And Services The data suggest inflationary forces are still gripping the economy, raising the prospect of higher rates.
Wall Street watchers are sounding the alarm ahead of next week’s Fed policy meeting, warning that the outlook for the U.S. economy in 2023 remains grim. First Bank Chief Executive Officers Goldman Sachs Group Inc. David Solomon JP Morgan Chase & Co. of Jamie Dimon recently shared their dire predictions about a possible recession.
“I think we’re going to have a recession when CEOs in this country are almost 100% global,” Paulson said. “Typically, a recession is something that comes out of left field and surprises the market. That will not happen here.”
Still, Paulson said he thinks the U.S. can still avoid a recession.
“There’s a lot of mistrust,” he said. “So much has already been discounted that it opens the door to a positive surprise and people need to catch up.”