Wall Street’s Most Outspoken Stock Bull Reverses, Now Top Bear as Dow eyes 20k.
— Holger Zschaepitz (@Schuldensuehner) January 6, 2017
Wall Street’s most vocal champion on U.S. stocks over the past two years is now its biggest bear.
Thomas Lee, managing partner and co-founder of Fundstrat Global Advisors in New York, published a note today saying the S&P 500 Index will finish the year at 2,275, about 3 percent lower than the median of 18 strategists surveyed by Bloomberg. His caution stems from policy risk and a yield curve adjustment he sees translating into an S&P 500 decline to 2,150 by mid-year before the index rebounds.
The “bond market is signaling inflation confusion,” and a flattening long-term yield curve, he wrote in a client note on Friday. That “generally leads to a 5 to 7 percent selloff,” he said.
It was Lee’s bullishness that made him the least accurate strategist on Wall Street in 2015, when the S&P 500 slid 0.7 percent. He doubled down in 2016 as the benchmark climbed 9.5 percent, and while his target overshot once again, he correctly predicted that the Federal Reserve’s decision to wait until December to hike rates and a recovery in corporate earnings would underpin stock gains into year-end.