Wall Street has tamped down stock market expectations in 2016 for a variety of reasons.
Less accommodative monetary policy, slow growth and geopolitical concerns only get the ball rolling. There's a whole slew of reasons why the year ahead may be only marginally better than the current malaise that is the 2015 equities picture.
Citigroup has been one of the more pessimistic forecasters, estimating that the economy has a 65 percent chance of veering into recession and expressing a generally muted view of conditions overall.
In a note to clients, Citi global strategist Jeremy Hale and others presented seven conditions total on why investors should be leery of stocks in the year ahead:
1. Margin pressure: Rising labor costs could cause compression on margins, the expansion of which has been the key fuel behind the nearly eight-year bull run.
2. Sentiment: A proprietary gauge Citi uses shows declining investor attitudes toward stocks, something that under normal circumstances can be viewed as a contrarian positive signal. Citi, though, said the yawning gap between sentiment and the level of the S&P 500 index is flashing a warning sign that prices aren't sustainable.