Byron Wien: Prepare for a pullback — the S&P is set to slide 6% or more

Widely followed investor Byron Wien says stocks have become overextended as they hit record highs, and he predicts a significant decline for the market in the months ahead.

"I think this is going to be a down year for the market. … I think it's going to struggle in the second half," the vice chairman at Blackstone Advisory Partners said Wednesday on CNBC's "Trading Nation."

Since the S&P 500 has risen 6.3 percent through Wednesday's close, that would represent a substantial loss for investors who are buying stocks now, as indexes hit all-time highs.

Wien's concerns come down to nothing more frightening than valuation levels that appear extended over historical averages.

"I don't think we're going to have a bear market," Wien said. "I just think the market is very fully priced, and we could have a pullback from current levels."

This is in line with a prediction made at the beginning of the year, when he foresaw that U.S. equities would suffer "a down year."

When he zooms out, Wien observes that companies have a lot of cash piled up on their balance sheets, and even with 2 percent economic growth, "I think companies will find a way to make money in that environment. So long-term, I'm positive about equities."

"But they're a little ahead of themselves now," he added.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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