Blackstone's Vice Chairman Explains Why The Market Is Due For A Correction

Byron Wien, Blackstone's multi-asset investment group vice chairman, was a guest on CNBC and explained why he felt the stock market is due for a correction.

Wien pointed out that the stock market has seen gains nearly every single day since the 2016 election under the assumption that President Trump would implement his pro-growth agenda, including a tax cut, dismantling regulation and infrastructure spending. The markets also priced in Trump revising or replacing the Affordable Care Act - all of which remain uncertain at this time.

"Trump campaigned on increasing growth," Wien said. "He said he could get growth from 2 percent where it has been since the recession ended to 4 percent. It now looks like he won't get to 3 percent and 3 percent was what the market was counting on. And that's why the market is correction."

Disconnect Between Stocks And Economic Growth

Wien was then asked how he could justify his bold economic projection just 60 days into Trump's presidency. He said there is no way the economy can grow at 3 percent for the year unless there are immediate tax cuts and improvements in the regulatory environment.

Nevertheless, Wien has a 2,500 target on the S&P 500 by the end of the year as he believes despite any near-term stalls in changing the Affordable Care Act, eventually "something will pass." The same can be said for tax cuts that "something will pass."

"I think the market is headed to higher highs I just think that this glitch in Washington is going to be the catalyst that will cause the inevitable correction," he concluded.

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