US stocks gain on trade hopes but at risk of 5-20 percent decline

The S&P 500 rose 0.5 percent on Thursday, its fourth consecutive gain.

“U.S. officials reaching out to China saying they would be amenable to additional trade talks later this month—that’s all it took to get and keep the Dow up triple digits,” said Mark Esposito, chief executive of Esposito Securities.

However, John Thomas, chief investment officer of Global Wealth Management, is worried that markets may be “complacent” and underappreciate the impact of hte trade dispute.

Indeed, David Tepper, co-founder of Appaloosa Management, said that the current bull market is in the “late innings” and that stocks could drop 5 percent to 20 percent if trade tensions between the US and China increase.

“I don't think everything is discounted at this price right now,” he said.