Earnings-revision breadth, cited as a bullish market driver, has deteriorated, Morgan Stanley says.
But industrial stocks are still uniquely positioned to outperform, the firm says.
AdvertisementA key driver of stock-market bullishness is deteriorating, although there are still opportunities available, Morgan Stanley wrote in new research.
The firm is referring to earnings-revision breadth, which enjoyed an increase that coincided with a rally in small-cap stocks in recent weeks.
The chart below shows a deceleration in earnings-revision breadth for S&P 500 companies in recent months:Morgan Stanley"This does not offer support for a broad cyclical rotation," Morgan Stanley analysts wrote.
Persons:
Morgan Stanley, —, Mike Wilson, Industrials
Organizations:
Companies, Service, CIO