The market is ‘still in a state of delusion,’ says a hedge fund chief who’s returned 40% this year. Here’s why he thinks stocks have the potential to fall another 78%

• Last year, Crescat Capital’s Kevin Smith predicted a significant correction in the stock market.
• This year, Smith’s global macro hedge fund returned 40% to investors through April 30.
• He expects further pain for stock market investors due to a stagflationary environment.

Some of the biggest names in investing think further declines are on the horizon for the US stock market this year despite it already plummeting by double digits.

Morgan Stanley’s equity chief Mike Wilson, who predicted the last three market crashes, warned that stocks could fall another 14% by the end of the second quarter.

The famed economist David Rosenberg said the S&P 500 could fall an additional 17% to 3,300 points.