According to the Morgan Stanley strategist, December could bring “near-term volatility in both rates and equities”, claiming that the “January effect” could lift stocks once again at the start of the new year. The November rally was heavily spurred on by optimism surrounding interest rates, with investors increasingly expecting the Federal Reserve to cut rates amid signs of a slowing economy and cooling inflation.

Several Wall Street analysts have expressed optimism for stocks next year, with the likes of Bank of America Corp., Deutsche Bank Group AG, and RBC Capital Markets predicting the S&P 500 to reach record highs.

The post Morgan Stanley Expects Tough December For Stocks appeared first on theprimarymarket.com.

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.

The post Morgan Stanley and Goldman Sachs at Odds Over Market Outlook appeared first on theprimarymarket.com.

Speaking with Bloomberg TV, Wilson said that US stocks are heading towards a big drop later this year. He predicted a hit of more than 20% due to a combination of the poor earnings situation and the recent crisis in the banking sector.

“The earnings situation is way worse than what the consensus thinks, which is more in line with what we’ve been saying all along,” said Wilson. “And the banking stress only makes us more confident.”

According to Wilson, S&P 500 will hit lows between 3,000 and 3,300 points at some point in 2023 before bouncing back. His base case puts the index at 3,600 points to the end of the year, followed by the bull case at 4,200 and the bear case at 3,600.

“That path to 3,900 still goes through the low 3,000s ultimately,” he added.

It is important to note that Wilson isn’t the only one predicting a downturn for US stocks. Plenty of other top Wall Street strategists are believed to share his pessimism and expect sustained periods of a bear market.

The post Morgan Stanley Strategist Expects 20% Drop for US Stocks Later This Year appeared first on theprimarymarket.com.

According to the Morgan Stanley strategist, December could bring “near-term volatility in both rates and equities”, claiming that the “January effect” could lift stocks once again at the start of the new year. The November rally was heavily spurred on by optimism surrounding interest rates, with investors increasingly expecting the Federal Reserve to cut rates amid signs of a slowing economy and cooling inflation.

Several Wall Street analysts have expressed optimism for stocks next year, with the likes of Bank of America Corp., Deutsche Bank Group AG, and RBC Capital Markets predicting the S&P 500 to reach record highs.

The post Morgan Stanley Expects Tough December For Stocks appeared first on theprimarymarket.com.

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.

The post Morgan Stanley and Goldman Sachs at Odds Over Market Outlook appeared first on theprimarymarket.com.

Speaking with Bloomberg TV, Wilson said that US stocks are heading towards a big drop later this year. He predicted a hit of more than 20% due to a combination of the poor earnings situation and the recent crisis in the banking sector.

“The earnings situation is way worse than what the consensus thinks, which is more in line with what we’ve been saying all along,” said Wilson. “And the banking stress only makes us more confident.”

According to Wilson, S&P 500 will hit lows between 3,000 and 3,300 points at some point in 2023 before bouncing back. His base case puts the index at 3,600 points to the end of the year, followed by the bull case at 4,200 and the bear case at 3,600.

“That path to 3,900 still goes through the low 3,000s ultimately,” he added.

It is important to note that Wilson isn’t the only one predicting a downturn for US stocks. Plenty of other top Wall Street strategists are believed to share his pessimism and expect sustained periods of a bear market.

The post Morgan Stanley Strategist Expects 20% Drop for US Stocks Later This Year appeared first on theprimarymarket.com.