Jim Paulsen of Wells Capital Management is “optimistic on stocks,” a phrase which basically acts as a hedge in case his own prediction is wrong. That being said, he thinks the S&P 500 can possibly fall to 1,800, or a little lower.
“My guess is we’re going to break back down again yet; and break 1,800 [on the S&P 500], get everyone convinced we’re headed for recession, scare everyone it’s a bear market,” the chief investment strategist at Wells Capital Management told CNBC’s “Squawk Box.”
“I don’t think we’ll go a lot lower than that. We’ll be at 16 times trailing earnings at around that level,” he continued. “I think that’s a very sustainable multiple, even if we’re facing higher interest rates [from the Fed] over the next couple of years.”