Byron Wien, the reliably bullish vice chairman of Blackstone’s Private Wealth Solutions Group, change tack slightly in an interview with CNBC Thursday: He now believes a 10% to 15% stock-market correction this year is "virtually unavoidable."
Now, lest you interpret this call as a major reversal in Wien’s long-held view that the market will continue its inexorable march higher, Wien quickly clarifies that he still believes the market will finish 2018 higher.
Of course, if the market’s performance during the first five sessions of the year are a determining factor (and, judging by the historical data, it appears they often are) the market is almost guaranteed to finish higher this year, as Ryan Detrick pointed out when he noted that when the market climbs more than 2% during the first five trading sessions of the year, it has finished higher in an astounding 15 out of 15 cases.
"The year will end higher than it started no matter what happens along the way," he said, adding that he'd "absolutely buy" stocks on a correction because underlying fundamentals remain strong.
Still, Wien believes that "sentiment is bordering on the euphoric state” and that the market needs to let out some steam.
"When investors think they can't get into trouble, they usually do," Wien said Wednesday on CNBC's "Trading Nation." "We're vulnerable to a correction."
Surely, it’s no coincidence that Byron took the slightest step back from his permabullishness (which has obviously bolstered his reputation in recent years) the morning after the S&P 500 finished three points lower - its first retreat of the New Year - after Bloomberg reported (erroneously, as it turns out) that China was considering reining in its purchases of US Treasuries. Meanwhile, bond yields climbed to multiyear highs, recalling the warnings of Bill Gross and Jeff Gundlach.
"The market needs to have some kind of correction. There are some excesses in it. So I fully expect it to happen," he said.
When the selloff comes, it’ll be tech stocks that lead the main indexes lower - just as they helped propel markets to all-time-highs.
The big tech names are the most vulnerable to a selloff, Wein said.
Luckily for the bulls (and there are still plenty of bulls on Wall Street), Wein expects the correction to be immediately bought, as every dip inevitably is during the era of centrally planned markets.
Ultimately, he sees the S&P 500 finishing 2018 9 percentage points higher - as long as the 10-year Treasury yield stays below 3 percent.
But regardless of the US performance, Wien says there are more opportunities overseas (even with global stocks at all-time highs).
"India is still attractive. I think Japan is still attractive," Wien said.
Though readers might want to take Wien's prognostications with a grain of salt: As we noted earlier this month, aside from his bullish view on equities, Wien got little else right in 2017.