Spencer Platt | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) on October 10, 2018 in New York City.
The issue has hurt the market in the past. Last February, a higher than expected wage growth number panicked Wall Street. It sent the 10-Year Treasury yield above 3 percent and sparked a correction.
However, the market rebounded until running into more trouble in October, mainly on fears that the Fed will hike rates too aggressively, and potential impact of the U.S.-China trade war. Hooper is also watching these risks.
Her 2018 S&P 500 year-end range is 2750 to 2850. Currently, the index sits at 2760, and Hooper doesn’t expect sizable gains next year, either. She predicted the S&P will end 2019 somewhere between 2875 and 2975.
Hooper noted if certain risks don’t fall by the wayside soon, she’ll have to downgrade her forecast.
“I’m waiting for greater visibility. For example, if the trade situation worsens, then the odds go up in 2019,” she said. “The greater risk of a recession occurs in 2020.”
For now, she estimates next year’s recession odds are “pretty low” and isn’t ruling out a year-end rally.
“If we see an FOMC dot plot in December that confirms a more relaxed stance from the Fed, that could propel stocks higher,” Hooper said, speaking about the closely watched graphic representing the central bank’s expectations about rate policy.