Blackstone's Wien: Fear of Geopolitical Strife 'Keeps Me Up at Night'

Friday, 15 Aug 2014 10:37 AM

By Dan Weil

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The geopolitical turmoil coursing through the world the past few weeks has had only a minor impact on the stock market.

The S&P 500 slid 4.3 percent from its July 24 record high to its low last Thursday, but since then has rebounded 2.2 percent. The index stood at 1,963 Friday morning.

Still, Byron Wien, vice chairman of Blackstone Advisory, says caution is warranted, given the trouble in the Mideast, Ukraine and the South China Sea.

Editor’s Note:
New Warning - Stocks on Verge of Major Collapse

"Right now the market is saying that all of these things are going to work out favorably," he tells CNBC. "Well, maybe most of them will. But if one of them flares up, if the price of oil shoots up, that could create a calamity in the market. So that's what keeps me up at night."

The market is ripe for a stronger correction, because "sentiment is too positive," Wien said. But he still thinks the S&P 500 will reach 2,300 by year-end, as earnings growth accelerates in the second half of the year.

Not everyone is focusing on a correction.

"There is some feeling that events overseas are beginning to cool down a little bit, but also the retail numbers might suggest that the Fed is not going to be so aggressive in raising rates any time soon," Bruce Bittles, chief investment strategist at RW Baird, tells Bloomberg.

Retail sales were unchanged in July, the weakest showing in six months.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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