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Tags: wells | fargo | scott wren | stocks | fall | market | investors

Wells Fargo's Scott Wren: Stocks Poised to Fall Up to 8 Percent

(Mario Tama/Getty Images)

By    |   Wednesday, 27 September 2017 04:12 PM EDT

This year’s high-flying stock market looks to be headed for a fall before the calendar turns over to 2018.

Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, sees problems for the S&P 500 as the record year comes to a close.

"Our midpoint of our target range for year-end 2018 is 2,500," Wren told CNBC.

"We're basically there right now."

Wren is predicting a 4 to 8 percent dip from current levels before year's end. The official definition of a correction is a 10 percent drop, CNBC.com explained.

"Valuations are meaningfully stretched in that the trailing 12 month P/E ration on the S&P 500 is 20 and change. And, that's against about a 16½ 30-year median," Wren said.

"The net net move between now and the end of 2018 is probably going to be pretty small," he added.

There's a silver lining in Wren's 2017 downward spiral forecast. His year-end S&P 500 price target for 2018 is 2,450 to 2,550, which would suggest solid gains next year.

"That would give us say a 5 to 8 percent return [in 2018]," Wren said. "I think we're going to have an opportunity to buy some stocks."

Wednesday on Wall Street, losses in consumer stocks including Nike reined in gains for Wall Street’s main indexes after a burst of optimism fueled by hints President Donald Trump may finally be making headway on long-promised tax cuts.

Trump proposed the biggest tax overhaul in three decades, but offered scant details about how to pay for the cuts without dramatically driving up federal deficits, Reuters reported.

If passed, the plan would be Trump’s first significant legislative win since taking office in January.

“While I think there is optimism, time will tell us how much of an impact that (tax plans) will have on the market,” said Victor Jones, director of trading at TD Ameritrade.

“Investors are going to look for whether or not this plan will get any bipartisan support or at least full support of the Republican party.”

Comments from Federal Reserve Chair Janet Yellen have bolstered the case for a December interest rate hike, supporting the market so far this week.

Traders now see an 81.4 percent chance of a December rate hike, compared with 71.4 percent a week ago, according to CME Group’s FedWatch tool.

(Newsmax wires services contributed to this report).

© 2024 Newsmax Finance. All rights reserved.


InvestingAnalysis
This year's high-flying stock market looks to be headed for a fall before the calendar turns over to 2018.Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, sees problems for the S&P 500 as the record year comes to a close."Our midpoint of...
wells, fargo, scott wren, stocks, fall, market, investors
393
2017-12-27
Wednesday, 27 September 2017 04:12 PM
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