Here's why Morgan Stanley's top equity strategist is staying bearish on stocks despite the latest rally
Investors are poised for disappointment amid the ongoing stock market rally because earnings expectations are too optimistic, according toThe S&P 500 is up 8% year to date, and the Nasdaq is up 16%. But earnings estimates remain too high even after they've been consistently moving lower, and that they are"likely to fall rapidly as revenue growth is the next shoe to drop," he said in a Monday note.
"We would caution those cheering the softer-than-expected inflation data last week. Falling inflation, especially for goods, is a sign of waning demand, and inflation is the one thing holding up revenue growth for many businesses," Wilson warned. "If/when revenues begin to disappoint, that margin degradation can be much more sudden, and that's when the market can suddenly get in front of the earnings decline we are forecasting," he explained.
While inflation has cooled off sharply, it's still above the Fed's long-term target of 2%. That could cause the Fed to continue with rate hikes and keep rates higher for longer, dragging on stock prices.
Österreich Neuesten Nachrichten, Österreich Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Here's how different stock-market styles have performed during Fed rate pausesTraders and analysts are expecting one last Federal Reserve interest-rate hike in May before policymakers hit the pause button.
Weiterlesen »
ChatGPT can parse Fed statements and predict stock moves, studies sayChatGPT can accurately parse Fed statements and anticipate stock moves from corporate news, studies say
Weiterlesen »
JNJ Stock Price | Johnson & Johnson Stock - Investing.comGet today's JNJ stock price and latest Johnson & Johnson stock news as well as JNJ real-time stock quotes, technical analysis, full financials and more.
Weiterlesen »
HGO Returns to the Betrayals, Passion and Incredible Music of Puccini's Tosca With Tamara WilsonFor years, Tamara Wilson was pretty much no one's first choice to sing any of Puccini's work — which had absolutely nothing to do with her significant abilities as a soprano. 'Look at me,' she says laughing, pointing out her red hair. But after Wilson sang in Turandot, artistic directors...
Weiterlesen »
Court of Appeals pick Rowan Wilson clears state Senate Judiciary panelConfirming Rowan Wilson as chief judge would solidify a liberal majority on the Court of Appeals ahead of a pending case that could determine control of the U.S. House next year.
Weiterlesen »
Chief Judge nominee Rowan Wilson sails through Judiciary Committee in low-key hearing | amNewYorkThe governor's nominee for Chief Judge of the Court of Appeals, Rowan Wilson, was voted through the Senate Judiciary Committee on Monday after enduring a far lower-key hearing than the prior nominee, Hector LaSalle.
Weiterlesen »