Morgan Stanley's Wilson Doubts Year-End Stock Rally
Morgan Stanley's Michael Wilson, named the best portfolio strategist by the latest Institutional Investor survey, believes that investors hoping for a year-end stock rally will be disappointed. Wilson points to narrowing breadth, cautious factor leadership, falling earnings revisions, and fading consumer and business confidence as indicators of a different story than the consensus. He notes that profit expectations are too high for the fourth quarter and 2024, and monetary and fiscal policy are unlikely to provide relief. The stock market is starting to feel the impact of Federal Reserve tightening, with interest rate-sensitive stocks underperforming and defensive sectors outperforming.
