A macro hedge fund investing chief expects a 42% correction in the S&P 500 to play out

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  • Kevin Smith is the founder and CIO of macro hedge fund Crescat Capital.
  • Smith has a 2,623 price target on the S&P 500, which he expects to see within a year.
  • In a new note, he lays out 5 ‘substantial risks’ in the market and how investors need to position.
  • See more stories on Insider’s business page.

One of Wall Street’s most bearish analysts turned exceedingly bullish two weeks ago.

Wells Fargo’s Christopher Harvey upgraded his bearish S&P 500 price target of 3,850, which he set in late 2020, to 4,825, representing an increase of 6.7% from the S&P’s current level of around 4,525.

Harvey joins a number of strategists upgrading their year-end estimates for the S&P 500. On August 5, Goldman Sachs equity analysts upgraded their target to 4,700, while analysts at JPMorgan upgraded theirs to 4,600

A few notable exceptions to the bullish outlook include Morgan Stanley’s Mike Wilson, who is looking for 4,000 and Bank of America’s Savita Subramanian, who has a target of 3,800.

Joining this bearish club is Kevin Smith, the chief investment officer of macro hedge fund Crescat Capital, who currently has a target of just 2,623, which is roughly 42% where it is right now. He expects this decline to play out within the year.

In a new research note on August 30, he lays out his bearish outlook for the stock market.

“In our analysis, the US stock market today is historically overextended and poses substantial risks,” he wrote.

Here’s the 5 reasons Smith’s worried:

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