Rosenberg Warns of Potential 25% Stock Drop in 2024, Citing High Valuations and Weakening Economic Signals
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David Rosenberg, who predicted the 2008 recession, warns that stocks could face a 25% drop in 2024, similar to 2022. His equity market models are at the lowest possible levels.
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Rosenberg's model incorporates valuations, sentiment, technicals, positioning, and fundamentals. It indicates poor risk/reward currently.
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Valuations are high by measures like the Shiller P/E ratio. Positioning is also elevated with high household asset allocation to stocks.
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While some economic data is strong, leading indicators show weakness ahead. Rosenberg believes a US recession is still coming.
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If inflation rebounds or unemployment rises meaningfully, Rosenberg says "look out below" for stocks. Consensus expects continued gains. Key data will determine if soft landing happens.