Morgan Stanley and Goldman Sachs, two of Wall Street’s largest investment firms, have expressed conflicting outlooks on the New York stock market following a three-week slump. Experts are still at odds with one another over
Michael Wilson of Morgan Stanley exhibited a cautious approach, claiming that economic sentiment can further weaken and that stock investors have so far been too optimistic about a soft landing. “It’s fair to say that we just don’t know the answer to the question, yet, in terms of a soft landing outcome and an associated rebound in pricing power,” Wilson explained, referring to how cooling inflation has suppressed businesses’ abilities to raise prices.
Goldman Sachs’ David Kostin, on the other hand, believes that investors can afford to increase market exposure. While Goldman Sachs’ equity sentiment indicator dropped for the first time since December, Kostin is of the opinion that this is a temporary dropoff, with mutual funds, hedge funds, and retail traders poised to become more bullish with their decision-making as economic conditions improve.