Stock-market experts have been saying for weeks that equities are poised for another correction soon — the S&P 500 index fell 10 percent in September-October.
David Kostin, chief U.S. equity strategist at Goldman Sachs, has joined the chorus, saying fund managers are overly bullish, with long positions having turned "extreme" over the last five weeks.
"The U.S. equity markets are likely to experience a pullback some time in the next four to six weeks, and that would be pretty consistent with the magnitude of an extreme reading we see in the Commodities Futures Trading Commission data" of long positions, he tells
CNBC.
When it comes to valuations, the S&P 500 had a trailing price-earnings ratio of 19.16 Friday, up from 18.95 a year ago, according to Birinyi Associates.
To be sure, Goldman is maintaining its year-end target of 2,100 for the S&P 500 index.
"I think net-net you are looking at a market that is not going to trade a whole lot higher than where we are now," Kostin notes.
Star money manager Ken Fisher is much more bullish.
"In 2015 expect an S&P 500 and global bull market extension of 15 percent-plus," he writes in an article for
Forbes magazine. A 15 percent gain for the year would put the S&P 500 at 2,368.
As for Fisher's reasoning, "third years of presidents' terms haven't gone negative since 1939. . . . Average third-year return? 18.5 percent," he says.
Meanwhile, "today's sentiment is far from the euphoria in John Templeton's great wall of worry depiction, which holds that 'bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria," Fisher was referring to the legendary money manager.
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