The Case for a 22% Drop in S&P 500

<p><a href="bbg://people/profile/15508450" data-web-url="" data-cke-saved-href="bbg://people/profile/15508450">Troy Gayeski</a>, chief market strategist at FS Investments, says don’t wait until May to flee the stock market rally—get out now. He joined the <em>What Goes Up</em> podcast to explain why he’s expecting the S&amp;P 500 to bottom out at around 3,200, a roughly 22% drop from current levels.<br><br>“First of all, the strongest rallies have always been in bear markets,” he says. “Usually they’re driven by technical factors. And then there’s a narrative that’s put together to justify it: the more recent one was that inflation’s going to slow enough that the Fed won’t have to hike anymore, and then we’re going to have a recession and somehow that’s going to cause the Fed to cut rapidly. But recessions aren’t bad for revenue or earnings? It really makes very little sense.”</p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>