National Securities Managing Director and Chief Market Strategist Art Hogan has adjusted his year-end target for the S&P 500 Index from his initial prediction of 3,250 points to 2,850, citing continued uncertainty caused by a mixture of factors including the ongoing U.S. government shutdown and the U.S. – China trade dispute.

Speaking on CNBC Trading Nation, the longtime market bull who recently left investment bank B. Riley FBR stated that the current atmosphere of uncertainty will eventually result in reduced overall economic growth, as a result of which the S&P 500 will not match or surpass its all-time high of 2,940 which it achieved in September 2018.

In his words:

If the government stays shut for much longer, if we drag out this trade war for the entirety of the year — those earnings numbers are going to come down, and so will the multiple. Some of the global economic slowdown is being caused by the uncertainty over trade. If we have a slowing global economy, you are going to see that affect the earnings growth and the earnings power of the S&P 500.

Projected Impact of Trade War

A major factor in the performance of the S&P 500 is that about half of the companies listed on it generate over half of their annual revenues outside the U.S. For this reason according to him, the prospect of a prolonged trade war will likely be damaging to their earnings projections. As Wall Street embarks on the task of releasing projected Q1 earnings, Hogan believes that it will be difficult to find optimistic predictions for the year ahead in the current atmosphere unless a trade deal with China is agreed quickly.

Predicting that stocks will touch the record lows recorded in December by the end of the year, Hogan also stated however that a single bit of good news such as an end to the government shutdown or some clarity on a trade position with China would push stocks well out of the current correction neighbourhood which they fell into last month following a 12% drop from September’s all-time high.

Reiterating his longstanding bullish position, Hogan stated that without the ongoing atmosphere of uncertainty which, unfortunately “outweighs the fundamentals,” stocks are still undervalued.

CCN.com recently reported that U.S. President Donald Trump turned down a proposal by Republic senator Lindsey Graham to temporarily reopen the government after a record-breaking 25-day shutdown following a deadlock over Trump’s proposed southern border wall.