Jim Paulsen Warns S&P 500 Faces 10%-20% Correction as 10-Year Yield Nears 4.5%
Updated
Updated · Business Insider · Jun 22
Jim Paulsen Warns S&P 500 Faces 10%-20% Correction as 10-Year Yield Nears 4.5%
1 articles · Updated · Business Insider · Jun 22
Summary
A 10% to 20% S&P 500 correction could hit in coming months, Jim Paulsen said, arguing the market is substantially extended even as the AI-driven rally may run further first.
Paulsen tied that risk to tightening conditions: the 10-year Treasury yield rose to 4.49%, fiscal support has faded with the deficit down to 5.7% of GDP from 14.4%, and liquidity is weakening.
Oil is another trigger he is watching, saying past peaks in crude were often followed by stock declines once investors relaxed even as economic pressure kept building.
Sentiment and market internals also look stretched: Michigan consumer sentiment hit a record low in May, tech stocks are up 33% this year versus the S&P 500's 10%, and stock allocations are near 55%.
The broader warning is that stocks are diverging from both the economy and household mood, a gap Paulsen doubts can persist much longer without a reset.