Michael Wilson of Morgan Stanley, one of Wall Street’s prominent bears, said US stocks are expected to continue their current uptrend, but then fall again.
The bank’s strategist, led by Wilson, predicted that the S & P 500 Index could rise another 5-7%. However, it is expected that the decline will resume after that. Lower bond yields and lower oil prices eased concerns over sharp inflation and helped S & P 500 rise for the first time in four weeks on a weekly basis, the report said.
US stocks have been sluggish this year due to concerns that the hawkish stance of US monetary policymakers and accelerated inflation could lead to a recession. The S & P 500 is expected to fall 20% from its peak in January to enter the bear market, with the worst performance in the first half since 1970.
Wilson, who accurately predicted this year’s stock price depreciation, said that a 38-50% return from the downside does not mean that “it is unnatural or divergent compared to the uptrend in the bear market in the past.” Pointed out. Based on this, the S & P 500 species may rise to a maximum of 4200, which is a 5-7% rise from the closing price on the 24th. He expects interest rate-sensitive stocks to lead the rise.
On the other hand, he warned that the stock market would eventually seek a lower price again, not because of the peak of inflation, but because of concerns about a recession that would lead to lower oil prices and lower yields.
In his basic scenario of economic soft landing, the S & P 500 will bottom out at 3400-3500, down up to 13% from the closing price on the 24th. In the event of a recession, it is expected to drop by more than 23% to around 3,000.
Original title:Morgan Stanley’s Wilson Sees Brief Respite From Bear Market (1)
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