Institutional Investor Hall of Famer Richard Bernstein is making a bearish contrarian call on earnings.
Despite Wall Street's strong appetite for stocks right now, Bernstein believes there's a high probability corporate earnings will come in negative next year.
"The one thing that people are kind of missing out [on] here is that earnings in the United States are still decelerating," the CEO of Richard Bernstein Advisors told CNBC's "Trading Nation" on Wednesday. "By our work, we would argue that the first half of 2020 you could actually see a full-blown profits recession."
Bernstein's prediction doesn't reflect analyst consensus. The Street is widely expecting profits to grow by as much as 7.2% through the second quarter of 2020.
"Our research shows that analysts have never forecasted a proper recession," he said. "They're very good at doing it once it occurs, but they've never actually forecasted one ahead of time."
Bernstein, a CNBC contributor, started his firm in 2009 after a long run as Merrill Lynch's chief investment strategist. At the point of launching his firm, Bernstein was anticipating the biggest bull market of his career.
In September 2018, he was still deep in the U.S. bull camp, saying a "true bear market" was "nowhere to be seen." Now 14 months later, Bernstein is warning the end of the bull market may be in sight.
"We're incrementally cautious," he said. "I don't want to leave the impression that we're under our desks in the fetal position or anything like that."
Bernstein still has a 50% equity exposure in his portfolio. However, he was at about 75% for many years.
"By moving from 75 to 50%, everybody says 'oh, you're so bearish,'" said Bernstein. "That shows that people are actually becoming incrementally more bullish in this kind of late phase, momentum phase of the market."
His expectation is volatility will increase as profits continue to decelerate and liquidity slowly dries up.
"Volatility is probably going to be higher than people think next year," Bernstein said.
On Wednesday, the major indexes closed in negative territory and saw their worst day of the month.