• Stocks have been on a tear but there are still bears sounding alarms of a bubble about to pop.

• Bearish forecasters predict a crash as lofty valuations come back right down to earth.

• S ome big-name investors say stocks are flashing numerous warnings that a pointy pullback is near.

Stocks just keep climbing in 2024, however the bears have not been silenced and a few are warning that the market is in a bubble on the verge of bursting.

Fears of a painful sell-off have been rising in recent weeks, particularly as stocks proceed to interrupt through to record highs. The S&P 500 and the Nasdaq hit 4 straight all-time closing highs this week, with tech titans like Apple and Nvidia continuing to soar past a $3 trillion market cap.

However the bears on Wall Street warn that the keenness for artificial intelligence mirrors the web bubble of the late 90s — and the recent run-up in stock prices is a foul omen for investors.

Here’s what five forecasters must say concerning the latest rally — and why they think the stock market is headed for a fall.

Harry Dent

Stocks are within the midst of the “bubble of all bubbles,” and equities could lose greater than half of their value as inflated asset prices finally burst, in response to the economist Harry Dent.

When the bubble finally pops, the S&P 500 could drop as much as 86%, while the Nasdaq Composite could drop by around 92%, Dent predicted in a recent interview with Fox Business Network.

That bubble, which has formed over years of loose monetary and monetary policy, is already showing signs of “topping,” Dent added. Stocks are “barely” making latest highs, and equities have likely been inflated for the past 14 years, he estimated — far longer than most historical bubbles, which usually last for five to 6 years.

“It has been stretched higher for longer, so you may have to expect a much bigger crash than we got in 2008 and 2009,” he warned.

Dent has been making the case for a significant market crash for years. In 2009, he wrote a book predicting a stock market crash and ensuing economic depression, which he said could last for 10 years or more.

Capital Economics

Stocks have one other 20% to inflate before the bubble bursts, in response to Capital Economics.

The research firm is predicting the S&P 500 could see a steep correction following a rally to six,500. That is because there’s only so way more the market can gain before prices pull back, in response to John Higgins, the firm’s chief market economist.

Stocks already appear to be they’re in a late-stage bubble, Higgins said, pointing to excessive hype surrounding artificial intelligence on Wall Street.

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“Bubbles are inclined to inflate essentially the most of their final stages as the thrill form of reaches fever-pitch,” Higgins warned.

John Hussman

Elite investor John Hussman thinks stocks could plunge as much as 70% once the bubble bursts.

Hussman has been warning of a steep correction in stocks all 12 months, and said in a recent note to clients that a handful of red flags are signaling pain ahead.

In line with his firm’s most reliable valuation metric, the S&P 500 looks to be at its most overvalued since 1929, right before the stock market plunged and the US economy spiraled into an economic depression.

“I proceed to view the market advance of recent months as an try and ‘grasp the suds of yesterday’s bubble’ quite than a latest, durable bull market advance,” Hussman said in a recent note. “I also imagine that the S&P 500 could lose something on the order of 50-70% over the completion of this cycle, simply to bring long-term expected returns to run-of-the-mill norms that investors associate with stocks.”

“Put simply, my impression is that the period since early 2022 comprises the prolonged peak of considered one of the three great speculative bubbles in US history,” he later added.

Richard Bernstein Advisors

In line with RBA’s chief investment officer, Richard Bernstein, large-cap stocks are way overvalued and look positioned for a wipeout.

In a recent note, Bernstein noted that only a narrow group of stocks are propping up the market and that today’s mega-cap leaders are going to present back most of their gains and see dismal returns going forward.

At its worst, he predicted essentially the most highly valued stocks could drop 50%, generating losses that rival the dot-com crash.

“That is what I feel we’re ,” Bernstein warned. “It’s multiple years of serious underperformance.”

Yet, that would find yourself being a superb opportunity for investors who’re diversified in other areas of the market, Bernstein said. He noted that his firm is bullish in practically every other area of the market apart from the top seven mega-cap stocks.

UBS

The stock market is already flashing signs that it’s in a bubble, in response to UBS.

Typically, there are eight warning signs of a market bubble forming, and six of them have already flashed, the bank said. Strategists pointed to signs like growing corporate profits pressure, falling market breadth, and aggressive stock buying amongst retail investors.

The excellent news is that the bubble may not immediately burst. Stocks are looking most just like the bubble that occurred in 1997, quite than 1999, the analysts said.

“We only invest for the bubble thesis if we’re in 1997 not 1999 (which we expect we’re),” strategists said in a recent note.

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