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How S&P will lose 90 points: Strategist

The S&P 500 appears likely to end the year at 1,600 because of the Federal Reserve's possible tapering of asset purchases, Barclays Head of U.S. Equity Strategy Barry Knapp said Monday.

"You go back through Fed policy normalizations '83, '94, 2004, they're all the same irrespective of … the pace of policy accommodation removal," he said. "The Fed was aggressive in '94, somewhat passive in '83, and the point is the the stock market always sold off 7½ to 9½ percent with two different legs to that correction."

(Read more: Where to find gains ahead of Fed taper)

On CNBC's "Fast Money," Knapp said that one leg of that correction was led by the Federal Reserve's withdrawal of stimulus – or, the tapering of its $85 billion-per-month in bond buying.

That action would help lead stocks lower, he added. "And that financial push lower gets led by financials, discretionary and small caps."

(Read more: Top back-from-the-dead stocks)

Knapp's year-end price target for the S&P 500 was 1,600.

"The beginning of the year, we thought there was a fairly wide range of economic outcomes but less of a great dispersion, as great a dispersion, around equity market outcomes. In essence, we had a 1,525 price target, which was 10 percent total return in a less-than-4 percent nominal GDP environment. That seemed pretty good," he said.

But better-than-expected economic factors in the United States instead sent stocks higher.

(Read more: 'Too early' to buy here: Marc Faber)

"Public policy uncertainty, which had such a negative impact on business confidence and business spending in the middle of 2010, in the middle of '11 and in the middle of '12 actually improved decidedly this year," Knapp said. "Business investment picked up. Labor investment picked up. Capital investment picked up. And that created what we think will be a faster acceleration in earnings than we anticipated."

Knapp added that he expected to see a stock market rally to return in 2014.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

CNBC's Patricia Martell contributed research to this report.

Trader disclosure: On Aug. 12, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long GS; Joe Terranova is long MS; Joe Terranova is long VRTS; Joe Terranova is long OXY; Joe Terranova is long TRV; Joe Terranova is long EMC; Joe Terranova is long SJM; Joe Terranova is long TRIP; Joe Terranova is long SBUX; Joe Terranova is long HOS; Joe Terranova is long AXP; Joe Terranova is long PXD; Joe Terranova is long EOG; Joe Terranova is long CXO; Joe Terranova is long LTD; Joe Terranova is long CAT; Josh Brown is long DD; Josh Brown is long VAW; Stephen Weiss is short JCP; Stephen Weiss is long BBRY; Stephen Weiss is long POT; Stephen Weiss is long MOS; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long JOY; Stephanie Link is long GPS; Stephanie Link is long VALE; Stephanie Link is long EBAY; Stephanie Link is long FCX; Stephanie Link is long APC.

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