that an abrupt decline in corporate earnings will trigger a correction on Wall Street in the coming months, a scenario that would wrong-foot investors expecting US profit growth to take off again in the second half of the year.P 500 index to plunge 16 per cent this year to $US185, compared with its previous call of $US195. The new forecast sits a significant 17 per cent below consensus expectations.
The CIO believes Wall Street could suffer a pullback in the next fortnight as the US Treasury begins a substantial issuance of bills following the passage of the debt ceiling deal, which will drain liquidity from the market.From there, Mr Wilson expects the US sharemarket to bottom out in July before recovering in August.
Mr Wilson said that if the US economy fell into a recession, which he has has a 50 per cent chance of occurring, the Fed would probably loosen policy sooner and more significantly.The CIO has remained one of Wall Street’s biggest bears this year after correctly predicting the 2022 sell-off. And while the S, meaning a 20 per cent advance from its October lows, he is sticking to his guns.