Byron Wien Says S&P 500 Will Tumble Before Rallying to 4,500

U.S. stocks will sink in coming months before resuming their record-setting rally and faster growth will spark inflation and higher yields in Treasuries, according to Byron Wien’s annual list of surprises.

The S&P 500 will tumble almost 20% in the first half of 2021 and then advance to 4,500, according to a statement co-written by Wien, vice chairman of Blackstone Group Inc.’s private wealth solutions business, and Chief Investment Strategist Joe Zidle. U.S. economic growth will exceed 6%, causing the 10-year Treasury yield to rise to 2%, they forecast.

The S&P 500 fell 1.9% on Monday to 3,685 as of 1:15 p.m. in New York, while the 10-year yield hovered near 0.9%.

“The success of between five and 10 vaccines, together with an improvement in therapeutics, allows the U.S. to return to some form of ‘normal’ by Memorial Day 2021,” they predicted. “We begin the longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020.”