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A Wall Street expert lays out the exact scenario that could cause the stock market's next big meltdown

A Wall Street expert lays out the exact scenario that could cause the stock market's next big meltdown
YURI CORTEZ/AFP/Getty Images



Jim Paulsen, chief investment strategist at Leuthold Group, thinks a metric once "left for dead" could put an end to the decade-plus bull market.




He points to the unemployment rate, accommodative global central bank policies, and an expected weakening of the US dollar to bolster his thesis.




Paulsen is not alone in his views either. Tony DeSpirito, the chief investment officer for fundamental US active equities at BlackRock, and Chris Brightman, the chief investment officer at Research Affiliates, have expressed similar concerns.




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After the S&P 500 posted a total return of 31% in 2019, investors are entering 2020 bright-eyed and bushy-tailed. In fact, in the last decade, stocks have only experienced one down year on a total return basis: negative 4.38% in 2018. Not exactly earth-shattering.
But just because the market has been on a tear since emerging from the Financial Crisis doesn't mean money managers aren't well aware of the risks afoot.
Jim Paulsen, chief investment strategist at Leuthold Group, thinks a metric that was once "left for dead" has the power to uproot the stampeding bull. He's referring to inflation, for which he says a sharp increase would threaten the nearly 11-year rally.
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