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Some recent outlooks say the stock market is wildly over-valued and will drop 40% later this year when the U.S. economy drops into recession.
While the S&P 500 is in record high territory, this doesn't mean a market correction is a foregone conclusion. Some experts believe that the market is fairly valued and offer predictions that call for the stock market to continue to move higher.
KTRH Money Man Pat Shinn says that the wide divergence in opinions about the range of outcomes for the economy and the stock market is the widest that he has seen in his career. He believes that there is still a reasonable chance that the economy will experience a "soft landing" later this year. He sees the biggest risk to the economy as the timeliness (or lack thereof) of interest rate cuts by the Federal Reserve Bank.
Shinn also cautions not to confuse the state of the economy with the stock market - the two do not move in tandem, in real time. In fact, Shinn explains, the stock market generally indicates where the economy will be six months into the future.
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