Sage Investment Club

In late 2021, after three consecutive years of double-digit returns by the S&P 500, many Wall Street strategists were sure the stock market would continue to soar in 2022. But Mike Wilson, Morgan Stanley’s chief investment officer and chief U.S. equity strategist, wasn’t so optimistic. Wilson argued that a combination of “fire and ice”—or rising interest rates and fading economic growth—would hurt stock prices and lead to a challenging year for investors. Every time the stock market rallied throughout the year, Wilson warned that it was nothing but a trap. And he turned out to be right. The S&P 500 ended up sinking roughly 20% in 2022, finishing the year at 3,839—far from Wall Street’s lofty 4,800 average forecast. Now, with recent U.S. economic data increasing the hopes for a “soft landing”—where inflation is tamed without sparking a recession—the strategist says investors are repeating the same old mistakes. The S&P 500 has jumped more than 5% year to date amid fading inflation and recession fears, but Wilson believes corporate earnings are still set to take a hit, making the rise just another bear market rally. “The final stages of the bear market are always the trickiest, and we have been on high alert for such head fakes,” he wrote in a Sunday research note. “Suffice it to say, we're not biting on this recent rally because our work and process are so convincingly bearish on earnings.” ​ submitted by /u/TheRock_0001 [comments]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *