Jeremy Grantham, Jeffrey Gundlach, and other market veterans predict pain for stocks — and see a recession ahead

• The S&P 500 is trading near all-time highs as markets have shrugged off economic fears.

• Some top investors and economists are still warning stocks will drop and a recession will strike.

• Here’s what Jeremy Grantham, David Rosenberg, Jeffrey Gundlach, and Gary Shilling have said.

The S&P 500 burst past 5,000 points for the first time this week, as investors celebrated strong corporate earnings, slowing inflation, the growing prospect of interest-rate cuts, and the fading threat of a recession.

Yet several leading investors and economists remain convinced that stocks will tumble and a recession will strike the US. Here’s a roundup of their latest dire warnings:

“The stock market will have a tough year,” Jeremy Grantham told ThinkAdvisor recently, noting that US stocks are “almost ridiculously higher priced” than equities in other countries.

The market historian and cofounder of fund manager GMO sounded the alarm on a “superbubble” spanning stocks, housing, and other assets in early 2022.

He’s now warned that stocks could be hit not just by shrinking valuation multiples, but also declines in corporate profits as consumer spending and growth falter.

“The economy will get weaker,” he said. “We’ll have, at least, a mild recession.”

Grantham added that the conflicts raging in Ukraine and Palestine have created a geopolitical backdrop that’s “scary as hell” and could spell trouble when asset prices are at record highs: “There’s a rich collection of negatives right now.”

“The bull market in complacency will unravel as the recession few see, and few are positioned for, finally comes into view,” David Rosenberg predicted on LinkedIn last month.

The Rosenberg Research president and former chief North American economist at Merrill Lynch described the stock market’s 2022 plunge as an “appetizer” for what could happen once investors price a recession into markets.

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The economy escaped a…