The stock market has already crashed: Why a Wall Street veteran says Nike is the ultimate turnaround trade.

Veteran Wall Street strategist Larry McDonald argues that the S&P 500's run to record highs masks a less comfortable reality beneath the surface: a large number of individual stocks have already fallen sharply. In his view, index-level strength has obscured what amounts to a rolling bear market for many companies, leaving select names trading at depressed levels even as headline benchmarks climb.

Within that framing, McDonald points to Nike as a potential turnaround candidate — a stock whose decline may already reflect substantial pessimism. The logic is a familiar one in market analysis: when sentiment turns deeply negative on a well-known brand, expectations reset lower, and any sign of stabilization can shift the narrative. That is the essence of a contrarian, or "turnaround," thesis.

For observers, the takeaway is less about any single stock than about dispersion. When a few large companies drive index returns, breadth weakens, and the gap between the index and the average stock widens. What to watch: whether beaten-down names show improving fundamentals or earnings revisions, and whether market leadership broadens beyond the megacaps carrying the index.