Wells Fargo: Stock Market Primed for Correction as Growth Slows and Complacency Reigns
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The stock market is due for a correction as consumer spending slows and investors get overly optimistic, according to Wells Fargo's Chris Harvey.
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With the VIX at 13, a historically low level, investors are too complacent and not worried enough about potential economic slowdowns.
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Valuations are high at 20x earnings and Harvey doubts the Fed will cut rates in the first half of 2024 like some expect.
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Harvey has never seen the Fed cut rates just because they can - they typically cut because the economy is struggling.
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Harvey recommends defensive positioning in 2024 with a year-end S&P 500 target of 4,625, not much upside from current levels.