More doomsday talk from Morgan Stanley’s Mike Wilson - Says Stock Risks Rarely Been Higher. Honest question- has this guy ever been right? - Morgan Stanley’s Michael Wilson says US equities are facing a wall of worry, which could fuel a sharp selloff in the near future.
Mike has called for a market slump in 2023 which has yet to materialize, sees the S&P 500 at risk of a near-term drawdown. He expects the benchmark index to end this year at 3,900 — about 10% below Friday’s close — before rising to 4,200 in the second quarter of next year.
“The headwinds significantly outweigh the tailwinds and we believe risks for a major correction have rarely been higher,” Wilson said in a client note on Monday.
Morgan Stanley is sticking with an outlook for earnings that’s below the market consensus, expecting S&P 500 EPS to be $185 this year compared with the average estimate of $220. Wilson said deteriorating pricing and top-line disappointment will drive the earnings misses.
In addition to profit risks, Wilson also reiterated the headwinds from deteriorating liquidity due to record levels of Treasury issuance and fading fiscal support. He expects value shares to outperform growth as investors turn to defensive sectors.
After rallying to the highest level since April 2022 earlier this month, the S&P 500 has been retreating amid concerns that the hawkish Federal Reserve will drive the economy into a contraction as it battles stubbornly high inflation.
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Berkshire is hoarding so. much. cash.
Buffet indicator is showing some wild times ahead perhaps, combine that with Berkshires record high cash hoard of 30%... chart via barchart.com / Longtermtrends
Looks like we're going through something, but who would have thought with all these tarrifs, inflation and trade wars going on
Where does this end up long term with small stocks suffering white giant caps are taking all the coin?
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