Stock Market: Overbought and Due for Correction, Warns Expert

A strategist warns that the stock market is overbought and due for a correction, despite the broadening of the rally and optimistic views of a soft landing for the economy. The strategist believes that the recent gains are driven by mega-cap stocks, while the broader economy remains weak. Disappointing factory orders, weak industrial production, slower retail sales, and stricter lending standards are cited as indicators of a weaker economic environment. The strategist predicts a potential 10% pullback for the Nasdaq and a 5-6% pullback for the S&P 500, with a 70% chance of breaking last year's October lows in the event of a full-blown recession. This contrarian view contrasts with the increasingly bullish outlooks of other strategists.