Portfolio manager says a ‘healthy' correction could come if earnings and growth stall

If U.S. GDP growth slows and inflation rises, a market correction might happen, said Brian Arcese, portfolio manager of the Singapore-based Foord Asset Management.Stocks are expected to grow 11% in 2025 but if those expectations are not met that could be another"catalyst for correction," Arcese said.

"We are seeing economic growth in the U.S. slow. still quite healthy, but it is slow, right? That can be a catalyst," he said."If that continues to slow a bit more, if we were to see inflation tick up again, that could be a catalyst," Arcese said. "If we look at corporate earnings expectations for next year — even if you exclude IT and communication services where growth is exceptionally high — excluding those earnings, growth is expected to be 10 to 12% which is relatively high compared to history," he said."If you have high expectations coupled with high valuations, then if you do see that earnings growth start to slow, or expectations start to roll off, that could be a catalyst for correction," Arcese said.

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