U.S. Stocks Morgan Stanley: Too Early to be Bullish

The international situation is in a state of chaos. Concerns about the Fed raising interest rates, the risk of Russia‘s invasion of Ukraine, and the turmoil in the Middle East have all caused investors to become conservative, causing the US stock market to continue to fall. Today, it even fell by more than 1,000 points. Inflows have turned red, but Morgan Stanley analyst Michael S. “Winter is coming,” said Michael Wilson.

The Morgan Stanley analyst, who was skeptical about the previous highs of U.S. stocks, has now slumped since January to confirm his idea, while Michael. Wilson also released a report on the 24th, saying that the January slump was very much in line with his “fire and ice” argument. And according to him, when it comes to tightening monetary policy and slowing economic growth, the market is destined to fall.

Wilson said that the decline in U.S. stocks will continue, and borrowed lines from the well-known American TV series “Game of Thrones” to allege, “Winter in the U.S. stock market is approaching, because people worry that slowing economic growth will replace the Fed’s tightening policy and become a pressure on the stock market. The main reason for the decline.”

“We’ve been watching PMIs and corporate earnings revisions for signs that the stock market is bottoming, but we, the U.S. stock market hasn’t priced in that, it’s a long way from bottoming out, and looking at it now,” Wilson noted. Much too early.”

“Investors certainly have reason to be optimistic that Omicron will be the last wave of the pandemic, however this also means the end of monetary and fiscal stimulus” As restrictions are eased, people return to work fully and supply chains tighten The tension is expected to be lifted, which is conducive to fighting inflation, but it may also reveal whether the actual demand of various industries is real or exaggerated. “All in all, in the short term, investors need to ‘huddle up’ for a few months of winter as economic growth slows.”

Meanwhile, the earnings season so far has failed to ease pessimism about the economic outlook. Goldman Sachs Group strategist David Kostin said earnings forecasts for the next few months were “disappointing”, with only memory giant Micron beating expectations across the S&P 500.

Kostin said the market is increasingly concerned that if the Fed’s policy turns to a hawkish hawk, it could hit corporate earnings growth. “Investors need to find a catalyst in the short term to increase investment, but there is no obvious catalyst in the short term.”

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U.S. Stocks Morgan Stanley: Too Early to be Bullish - /10

Summary

The international situation is in a state of chaos. Concerns about the Fed raising interest rates, the risk of Russia's invasion of Ukraine, and the turmoil in the Middle East have all caused investors to become conservative, causing the US stock market to continue to fall.

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