As we discussed just minutes ago, with market volatility surging (and sliding), opinions about what happens next to the market are coming just as fast and furious, and while two noted technicians, Evercore ISI’s Rich Ross and Oppenheimer’s Ari Wald predicted that the selloff is almost over, more “fundamental” strategists are less sanguine. 

Speaking to CNBC, Blackstone’s bilionaire President and COO Tony James said that equity markets could fall as much as 20% this year: “Every historic norm says that stocks are very, very fully valued,” James said on Monday, adding that the market decline could be 10% to 20%

Echoing familiar concerns, James said that since the U.S. economy has been picking up for a while, any further stimulus from recent tax cuts may not have been necessary, and in fact could be destructive: “If you’re worried about interest rates and inflation, the stimulus could be the thing that tips us over into a rate spike,” James said.

Does this means that James is out of the stock market? In the interview, the Blackstone president said that he is investing his personal money in New York-based Blackstone’s products, and also holds floating-rate bank debt instruments yielding about 6%.

Separately, Guggenheim Partners CIO Scott Minerd also commented on the fate of the rally, saying that in a “Bull markets don’t die from old age. They typically get shot in the head.

Two weeks ago, Minerd prudently warned that Davos might be a flashing contrarian indicator and that investors should consider the positive message from what MarketWatch dubbed the “gilded boondoggle” as a potential reason to sell. In retrospect, he was right.

What’s next? Minerds was more sanguine than James, saying that “I’m a bull for the next year or so,” he told Barron’s. “There is another 15% of upside in the stock market from 2017’s close, but after a 300% run [from the 2009 lows], the question is how to time the exit. What are the signs?”

Minerd said he doesn’t think all the pieces are in place for a bear market just yet, though the parabolic nature of stocks right now is a bit unsettling. “Now, individual investors aren’t in the market yet, and that’s why I’m still bullish,” he explains, adding that he’s looking for a flat yield curve in the first quarter of 2019 as the signal to end the bull.

Historically, once the yield curve goes flat, stock returns for the next 12 months approximate zero. Then, a year later, you get the recession and bear market,” Minerd told Barrons.

“On the S&P 500 index, the current level [2819] is roughly where we could be a decade from now. Elevated stock valuations portend weaker returns over the next decade, and retaining some dry powder in the final year of expansion will allow equity and credit investors to take advantage of more attractive valuations,” he said.

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