The relief rally in U.S. equities has limited scope to go much further as risks to growth remain prevalent, according to Morgan Stanley’s Michael Wilson.
“Last week’s strength will prove to be another bear market rally in the end,” the strategist wrote in a note. “The key fundamental call we are focused on now is slowing growth, and our view that earnings estimates are too high.”
Morgan Stanley sees the S&P 500 reaching a maximum of 4,250 to 4,300 points in the current rally, a 3.4% gain from Friday’s close. The Nasdaq and small cap stocks are likely to rebound more on a percentage basis, as they usually tend to do in such circumstances, Wilson said.
U.S. stocks have had a volatile month amid fears that the economy might enter a recession as the Federal Reserve tightens its policy to tame soaring prices. Still, the S&P 500 recovered last week, and is set for positive returns in May amid lower valuations and expectations inflation may be peaking.
Wilson continues to be among Wall Street’s most prominent bears and correctly predicted the latest market selloff. The strategist forecasts the S&P 500 will trade close to 3,400 by the end of the second-quarter earnings season in mid-August, implying 18% downside from its latest close.
“The primary rationale ascribed to this particular rally beyond just an oversold bounce is that the Fed may be contemplating a pause in September,” Wilson wrote. Still, “inflation remains too high for the Fed’s liking and so whatever pivot investors might be hoping for will be too immaterial to change the downtrend in Morgan equity prices.”
The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.
IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.
Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.
A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.
As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.
Wellington explores how multi strategy hedge funds may enhance diversification
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
