- Morgan Stanley’s Michael Wilson has said the stock market rally is over.
- “Now we are sellers again,” they said from the bank and estimate that the S&P 500 will fall to its lowest level again this year.
- Wilson highlights this outlook a week after noting that stocks have more room to go with the holiday season.
A piece of news caught the attention of investors on Monday. It is that one of the main strategists of Wall Street, Michael Wilson, of Morgan Stanley, clarified that he crossed sides: now he is a “bear”.
Wilson commented that the rise that the stock market has been experiencing has ended, so he noted: “Now we are sellers again.”
The expert added that the S&P 500 has never broken out of its downtrend throughout the year and understood that it is time to take another position after the flagship index of the United States rebounded more than 6% in the last month. “This makes the risk-reward ratio of playing for more odds pretty poor at this point,” he wrote.
The strategist’s remarks came as a surprise, however, as he stressed just a week ago that Wall Street’s rally could continue into December, even setting a price target for the S&P 500 of 4,150 points, up 2.5% from current levels.
In addition, his fellow strategists have also stressed that the opening of China could give a new boost to stocks, after the strong stance the government took with its Covid Zero policy.
With this scenario that the bank anticipates, of cooling economic growth and persistent inflation, Wilson recommended that investors take a defensive stance again with shares of health, public services and basic consumption.
Finally, it was also negative with respect to 2023, since it considers that the drop in corporate profits will affect the stock market.
