The top-rated strategist sees a “volatile path” to get to his 2023 year-end S&P 500 base-case target of 3,900 index points, about 2% below where the gauge closed on Friday. He expects stocks to fall as earnings estimates come down, before rebounding in the second half of the year.

“The path forward is much more uncertain than a year ago, and likely to bring several twists and days/weeks of remorse for investors regretting they traded it differently,” Wilson wrote in a note on Monday. In the short-term, he sees the stock-market rebound sparked by last week’s good inflation data running for a few more weeks.

The portfolio strategist — who correctly predicted the slump this year and is ranked No. 1 in the latest Institutional Investor survey — said consensus earnings estimates for 2023 are still much too high. His base case is for U.S. company profits to decline 11% in 2023, before a strong rebound in 2024 as positive operating leverage returns.

His comments sound another warning for U.S. companies wrapping up their weakest earnings season since the first quarter of 2020, marked by the impact of high inflation, a stronger dollar and some dramatic profit warnings.

Wilson expects the S&P 500 to trough between 3,000 and 3,300 index points — at least 17% below current levels — in the first quarter. He recommends investors stay defensively positioned from a sector and style standpoint “until the estimates reflect the bust.” After upgrading staples, the strategists are overweight on that sector as well as healthcare, utilities and defensively-oriented energy stocks.

JPMorgan Chase & Co. strategist Mislav Matejka is more positive. He sees continued support to equity markets from a peak in bond yields, cooling inflation, light positioning, and the likelihood of a smaller-than-typical earnings contraction, according to a report on Monday.