Markets mixed as S&P 500 faces “several market corrections”

Markets were mixed on Tuesday.

The S&P 500 fell 0.3 percent but the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 surged 1.6 percent.

“We’re not surprised to see a bit of a pullback from the standpoint that through December the market got really overbought,” Bob Phillips, managing principal of Spectrum Management Group.

“A healthy domestic backdrop, coupled with the Fed on hold for the year, means that investors should buy any Iran-induced equity sell-off, barring a war that closes the Strait of Hormuz,” wrote BCA Research analysts in a Tuesday note.

Indeed, Blackstone’s Byron Wien thinks that easy monetary policy will help push stocks higher in 2020.

“Even though some observers believe valuations are stretched, a surge in investor enthusiasm pushes the Standard and Poor’s 500 above 3,500 at some point during the year,” he wrote.

Nevertheless, Wien said he expects “several market corrections” of at least 5 percent in the coming year.

Francois Trahan, head of US equity strategy for UBS, is more circumspect.

“We expect a V-shaped year for the S&P 500,” Tranhan said in a note, with the index dropping as much as 16 percent by May before recovering in the second half of the year.