In the 1970s and 1980s, TV ads for brokerage firm E.F. Hutton had the tagline, "When E.F. Hutton talks, people listen." The same slogan could describe Byron Wien, a respected market guru associated with The Blackstone Group since 2005. Before that, he spent 21 years as an investment strategist at Morgan Stanley, during which time he also co-authored a book with legendary hedge fund manager George Soros. Wien believes that the S&P 500 Index (SPX) can reach the 3,000 mark after the midterm elections in November, representing a gain of roughly 10% from the July 2 close and over 12% from the start of 2018, but cautions that it may be a bumpy ride. "I always thought that we'd go back and test the February lows," he told CNBC.

'Powerful Earnings'

In justifying his prediction of 3,000 on the S&P 500, Wien told CNBC: "I think that's realistic because earnings are coming through very powerfully. Second quarter, I think, is going to show year-over year earnings improvement of 25%. And I think we're going to be plus-20 [percent] for the remaining two quarters." Nonetheless, he said: "I think the summer's going to be dull. I think we're going to mark time until we get to the November elections." Wien told CNBC that he still likes technology, biotech and energy stocks right now. He believes that oil prices are headed up, and see the recent pullback in tech stock prices as a positive going forward.

^SPX Chart

^SPX data by YCharts

'Confusion on Every Level'

Asked by CNBC during his June 26 interview whether he agreed with the recent prediction by hedge fund manager Paul Tudor Jones that the fourth quarter will be an exciting, even "crazy," time for traders due to an uptick in volatility, Wien said "I'm consistent with his view." The reason, he elaborated, is that "We have confusion on every level," citing rifts within both the Democratic and Republican parties, as well as mounting uncertainties stirred up by President Trump's tough talk and actions on trade. (For more, see also: Tudor Jones: Stocks, Rates Will Rise in 'Crazy' Market.)

Risks From Trade and Protectionism

With respect to the president's goal of winning more favorable trade deals for the U.S., Wien said "I think Trump is going to be successful." Regarding getting tough with China on trade, he said "I think that's the right thing to do." He expects that the U.S. will stay in NAFTA, and warns that the U.S. should not be picking fights with Canada, Mexico and Europe over trade.

Joe Zidle, an investment strategist at Blackstone, apparently is more worried about trade than Wien. As Zidle told CNBC in a later interview: "Trade is going to be a risk. Rising protectionism could slow growth, it's going to be inflationary." Nonetheless, he's on the same page as Wien, expecting year-over-year earnings growth of that "will accelerate for the rest of the year," to about 20% on a year-over-year basis, driving the S&P 500 to a new all-time high of 3,000.

Art Hogan, a longtime bull who's currently the chief market strategist at B. Riley FBR, is so nervous about trade conflicts that he may cut his own target of 3,000 on the S&P 500, per a third CNBC report. "Third- and fourth-quarter [earnings] growth could be impaired," he warned, indicating that uncertainty over trade may cause big companies to hold off on making big decisions. By contrast, the largely domestic-facing companies in the small cap Russell 2000 Index (RUT) should be largely unscathed, he noted.

Dire Predictions

Meanwhile, a flat yield curve normally is a sign of a slowing economy, while an inverted yield curve, with short-term rates higher than long-term rates, typically is a sure-fire indicator of an upcoming recession. A fourth CNBC report indicates that the yield curve is at its flattest since 2007, when the last recession began. In contrast to the relatively upbeat views of Wien and Zidle, Tudor Jones sees dangerous asset bubbles and a "frightening" recession ahead. (For more, see also: Investors Should Brace for a 'Frightening' Recession.)

Other respected observers have warned of a looming recession, stock market crash or both in recent months. Among these are former Federal Reserve Board Chairman Ben Bernanke, former OMB Director David Stockman, and emerging markets fund manager Mark Mobius, to name just a few. (For more, see also: Bull Market Seen Ending in 2019 After Fiscal 'Sugar Rush'.)

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