Don't Be Surprised If The S&P 500 Sees 1,900 Again Before The Year Ends, Here's Why

The bond markets have witnessed a selloff recently. However, the stock market is still holding tight, but for how long can it manage to do so?

Jim Paulsen from Wells Capital Management, was on CNBC Wednesday to answer that question.

Good News = Bad News For Wall Street

“I think we have turned the corner in the United States,” Paulsen said. “We are in a bit of a unique situation, I am expecting a bounce in global economic growth just about everywhere due to the drop last year in energy cost and the drop across the globe in sovereign bond yields.”

He continued, “But most places that’s going to be good, but for the United States that’s now at full employment or very close to it, a good news is rapidly becoming bad news for Wall Street. We are starting to see that already with bond yields continually backing up. I think we are going to see stocks start to struggle with that more here in the United States.”

Period Of Turbulence

Paulsen was asked if by struggle he meant that stocks are going to correct. He replied, “I since year end felt that the market […] is going to be in a very violent sideways trading range this year and I think it will maybe suffer a correction before the year is out.”

“Maybe from somewhat higher levels if we get excited about growth here in the interim move up 2,200, but I wouldn’t be surprised if we see 1,900 again before the year is out. I still like stocks long term, but I’d rather run through this period of turbulence over the next 12 months.”

“More so, out of the United States in markets that don’t face the full employment over heat pressure that we are starting to face in the United States,” Paulsen concluded.