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☆ Morgan Stanley shares 14 safehaven stocks with highly-stable and quality earnings to bet on as investors continue to ignore a sharp pullback in earnings hurtling toward the market
▼ + stars: | 2023-06-08 | by ( William Edwards | ) www.businessinsider.com time to read: +2 min

Morgan Stanley's Mike Wilson says investors are wrongly betting on a Fed pivot in 2023. Wilson said defensive areas of the market are the best place to be right now. For example, Wilson recommends investors stay in defensive sectors, like healthcare, consumer staples, and utilities. Defensive stocks tend to perform better than their cyclical counterparts in down economic environments. Another way to stay defensive, Wilson said, is to look to companies with stable and quality earnings.

Persons: Morgan, Mike Wilson, Wilson, Morgan Stanley's, Morgan Stanley Organizations: US, Federal Reserve

☆ Halfway through 2023 Wall Street still can't agree on the earnings outlook
▼ + stars: | 2023-06-06 | by ( Bob Pisani | ) www.cnbc.com time to read: +4 min

A strange year: Halfway through, there is a wide difference of opinion on earnings Strategists analyze the macroeconomy to come up with an estimate for corporate earnings. They analyze individual company performance to come up with earnings estimates, which are then aggregated into an overall estimate by agencies like FactSet or Refinitiv. The S & P 500 reported $218 in earnings in 2022, according to Refinitiv. This highlights the difference between analysts and strategists: Analysts have models for earnings of individual companies, not the macroeconomy as strategists do. However, in this case, their reticence to slash earnings estimates in expectation of an imminent recession or a banking crisis has proved to be correct.

Persons: Morgan, Mike Wilson, Wilson, Goldman Sachs, Jan Hatzius, Mike Wilson's, John Stoltzfus, Oppenheimer, David Kostin, Brian Belski, Jonathan Golub, Lori Calvasina, Savita Subramanian, Chris Harvey, Ed Clissold, Ned Davis, Hatzius Organizations: Here's, BMO, Credit, RBC, Wells, Bloomberg, Bank Locations: U.S

☆ Stocks are up big this year. But top Wall Street strategists are warning that trouble is brewing under the surface of the market — threatening to sink it.
▼ + stars: | 2023-06-06 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Six months into 2023, the S&P 500 is having an impressive year, returning more than 11% so far since January. Only 44% of S&P 500 stocks are trading above their 200-day moving averages, according to LPL Financial. Technology and consumer are the only sectors up on the year, and even they are exhibiting narrow breadth," he said. Bank of AmericaOf course, market breadth could improve if the fundamental economic outlook improves along with investor sentiment. If the labor market stays sturdy, a stock market rally could become more sustainable.

Persons: David Rosenberg, Mike Wilson, Here's David Rosenberg, Bank of America Merrill Lynch, Marcelli, Morgan Stanley, Adam Turnquist, Jeffrey Buchbinder, LPL, Savita Subramanian Organizations: Apple, Microsoft, Nvidia, Meta, Bank of America, Rosenberg Research, North, UBS, NYSE, Technology, of America's Locations: North American, China

☆ Morgan Stanley's Mike Wilson says don’t buy this breakout, a market correction is coming
▼ + stars: | 2023-06-05 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Morgan Stanley's Mike Wilson is sticking with his bearish call for a tactical correction despite the recent rally driven by technology stocks. The widely followed strategist stood by his base case for the S & P 500 to finish 2023 at 3,900, about 9% below Friday's close of 4,282.37. Wilson's forecast is well below the average year-end forecast of 4,157 from Wall Street strategists, according to CNBC Pro's market strategist survey , which rounds up the top 15 strategists' predictions. The S & P 500 has gained more than 2% this month alone, pushing its 2023 gains to nearly 12%. "We don't think the emergence of these factors negates our tactical downside call as we see 2023 earnings facing significant headwinds," Wilson said.

Persons: Morgan, Mike Wilson, Wilson, he's, CNBC's Michael Bloom Organizations: Wall Street, CNBC, Nasdaq

☆ A top Wall Street investment strategist breaks down why stocks are setting up for a 22% drop in the second half of the year — and shares 2 signs that show a recession is likely
▼ + stars: | 2023-06-03 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Piper Sandler's Michael Kantrowitz says a recession is hurtling toward the US economy. He pointed to stocks falling in lockstep with rising unemployment claims in 2007, 2000, 1990, 1981, 1973, and 1969. Today, investors are again doing a poor job of forecasting rising unemployment claims in the months ahead, Kantrowitz believes. Underpinning Wilson's call is an earnings recession this year that investors aren't pricing in. "We first started talking about the coming earnings recession a year ago and received very strong pushback, just like today.

Persons: Piper Sandler's Michael Kantrowitz, Kantrowitz, Michael Kantrowitz doesn't, Piper Sandler, it's, Louis, Greg Boutle, Cantor Fitzgerald's Eric Johnston, Venu Krishna, Morgan Stanley's Mike Wilson, Wilson, Albert Edwards Organizations: Energy, Survey, Federal Reserve Bank of St, BNP, Barclays, Conference, Board, National Federal, Independent, of Labor Statistics, Generale's Locations: lockstep

May 28 (Reuters) - Good news of a tentative deal for the U.S. debt ceiling impasse may quickly turn out to be bad news for financial markets. "That's where the debt ceiling matters." In that case, "the impact on broader financial markets would likely be relatively muted," Daniel Krieter, director of fixed income strategy, BMO Capital Markets, said in a report. Some bankers said they fear financial markets may not have accounted for the risk of a liquidity drain from banks' reserves. Bankers put it to hope that the debt ceiling impasse would be resolved without significant dislocation to markets, but warn that's a risky strategy.

☆ A notorious market bear who called the 2000 and 2008 crashes warns the S&P 500's 17% surge since October is a bear market rally — and that stocks are ripe for a decline of up to 60%
▼ + stars: | 2023-05-27 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Since October 2022, the S&P 500 is up 17% following a 25% decline as the Fed embarked on its rate-hiking cycle. The median S&P 500 price target for the end of the year is 4,000. Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009. The S&P 500, by comparison, is up 1.1% over the past year.

☆ Morgan Stanley strategist Mike Wilson says don't be fooled, this is not a new bull market
▼ + stars: | 2023-05-22 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

The S & P 500 's range breakout last week may not signal a bull market ahead, Morgan Stanley warned. But he said that isn't enough to confirm a new bull market given there are signals warning otherwise. "Rather than a short squeeze, the market was driven by the biggest winners as more market participants convinced themselves the next bull market may have begun and they can't afford to miss it." .SPX 6M line The S & P 500's last six months Market fundamentals also aren't helping the bull case, he said. Excluding technology stocks, the S & P 500's price-to-earnings multiple is 18 times, still putting it in the top 15% of historical levels.

☆ A 31-year market vet who called the current bear market warns an impending credit crunch and recession will sink stocks by 45% as valuations remain higher than dot-com bubble levels
▼ + stars: | 2023-05-13 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Indicators like initial and continuing unemployment claims and loan demand show weakness. A recession paired with high valuations spells trouble for stocks, he said. For example, the number of initial unemployment claims is starting to jump at a recessionary pace, Wolfenbarger said. The four-week moving average of initial unemployment claims has risen 29% over the last eight months. Hussman FundsWhat others are sayingMany market onlookers have highlighted high stock market valuations in recent weeks.

☆ 'Recession is a done deal': A renowned market bear who called the dot-com bubble warns a deep and long downturn will destroy corporate profit margins — setting stocks up for disaster
▼ + stars: | 2023-05-06 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

But as data continues to come out in the months ahead, Edwards says to pay attention to details beneath the headline numbers. Sure enough, revisions to February and March numbers reported on Friday paint a picture of a weakening labor market. "I think the recession will lead to a collapse in margins and profits and do a lot of damage." In terms of his view on the labor market, Edwards has company in Ian Shepherdson, the chief economist at Pantheon Macroeconomics. But bulls do remain, and they're betting on a scenario where inflation continues to come down — it hit 5% in March, down from its 9.1% peak last year — and the labor market remains intact.

☆ Morgan Stanley: Buy these 41 highly efficient stocks that are set up for success this year while earnings and the economy continue to weaken
▼ + stars: | 2023-05-05 | by ( James Faris | ) www.businessinsider.com time to read: +3 min

Morgan Stanley is looking past earnings beats and expects more declines this year. "While the quarter has been stronger than expected thus far, mentions of tougher macroeconomic conditions and overall caution remain prevalent," Wilson wrote. Morgan StanleyIf the economy continues to lose momentum, Morgan Stanley thinks corporations should be concerned about negative operating leverage, which is when sales fall faster than expenses. 41 stocks to buy that will hold up in a weak marketMorgan Stanley thinks an earnings recession is imminent, but it doesn't recommend running from stocks entirely. Below are 41 stocks that have an overweight rating from Morgan Stanley and are in the top quintile of operational efficiency among the 1,000 largest US-based companies.

☆ The Fed could deliver the final rate hike of a historically aggressive cycle today. Here's what to know.
▼ + stars: | 2023-05-03 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

All eyes are on the Fed today as officials ready their decision on what could be the final rate hike of the cycle. We'll hear from central bank chief Jerome Powell today at 2 p.m. The last time the fed funds rate hit that level was during the housing boom in 2006, in the run up to the 2008 crisis. Broadly, markets are acting as if today's potential rate hike will be the final one of the Fed's lengthy, aggressive cycle that's brought so far nine consecutive raises, the last of which was a 25 basis-point move in February. "The market is telling you, in terms of forward yield curves, that they expect the Fed to make a mistake."

☆ Morgan Stanley: A strong earnings season is giving investors a false sense of security. These 20 defensive stocks have the stability to survive the downturn that's still coming.
▼ + stars: | 2023-05-02 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +4 min

But on the back of slowing macroeconomic data, Morgan Stanley says this optimism may be unwarranted. The bank shared 20 defensive stocks with stable earnings to buy as markets grow more volatile. Perhaps the metric that demonstrates this best is earnings revisions breadth, or the ratio of companies revising future guidance higher compared to those lowering guidance. In a May 1 note, Morgan Stanley CIO Mike Wilson wrote that "revisions breadth for the overall S&P 500 is up 5.5% since earnings season began." Wilson pointed to a correlation between a change in price and revisions breadth as one catalyst for this change in consensus.

☆ Are we in a recession? Elon Musk says the pile of failed banks proves it.
▼ + stars: | 2023-05-02 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

As for today, let's see what Elon Musk and Larry Summers have to say about the state of the economy. In any case, ex-Treasury Secretary Larry Summers said recession odds for the next year are now sitting at 70%. These six factors suggest the stock market bottomed last October. Morgan Stanley's top equity strategist Mike Wilson thinks investors are banking too hard on a potential Fed rate cut this year. That discrepancy could set the stock market up for a sell-off, in his view.

☆ Morgan Stanley's top strategist says second half profits will disappoint — so own these stable growers
▼ + stars: | 2023-05-01 | by ( Sarah Min | ) www.cnbc.com time to read: +3 min

Investors are in for a rocky second half of the year, so it's time to take a look at stable earnings growers, says Morgan Stanley's top strategist Mike Wilson. It's also rooted in the view that companies broadly have already right-sized expenses and that margin expansion can now take hold," Wilson wrote to clients on Monday. In this uncertain climate, the strategist said he prefers stocks with stable earnings. They are: Coca-Cola surfaced on Morgan Stanley's list for stable earnings growers. UnitedHealth Group was identified as a stable earnings grower.

☆ A notorious market bear who called the 2000 and 2008 crashes says a 60% decline in the S&P 500 is likely as high valuations and weak investor sentiment create a 'trap door' scenario
▼ + stars: | 2023-04-29 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

The chart below shows how far the S&P 500 would have to fall to provide either a 10% return or 2% premium over Treasury bonds. He sees the S&P 500 finishing 2023 at around 3,150, he told YouTube channel Wealthion. Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009. The S&P 500, by comparison, is up 0.8% over the past year.

☆ Stocks are headed into risky territory as the Fed keeps policy tight and earnings growth slows, Morgan Stanley's chief stock strategist says
▼ + stars: | 2023-04-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks are facing risks as the Fed continues to keep monetary policy tight, Morgan Stanley's Mike Wilson said. Wilson previously has warned of an earnings recession that could rival 2008. "Markets often reprice late in the cycle when they realize that Fed policy is not accommodative enough to compensate for the slowing growth backdrop," Wilson said in a note on Monday. For the first quarter, the consensus view on Wall Street is for a 9% decline in earnings growth in S&P 500 companies, followed by just a 4% drop in the second quarter, with earnings growth returning the second half of the year. We would agree with that conclusion if we believed the consensus forecasts," Wilson warned.

☆ 'The equity market is poised to struggle in the weeks and months ahead': Comerica Bank's CIO says the S&P 500 is primed for a 15% drop as weak earnings, high valuations, and a hawkish Fed all work aga
▼ + stars: | 2023-04-22 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Year-to-date, the S&P 500 is up 8%. Plus, when the Consumer Price Index is between 4-6% like it is now, it usually dictates that the S&P 500 trades at a lower multiple than it is. "For example, at the current S&P 500 P/E of 19, the earnings yield for stocks is 1 divided by 19, or ~5.2%. While he sees 15% downside in the months ahead, he also believes the S&P 500 will return to current levels by the end of 2023. Morgan StanleyWilson has also repeatedly warned of an earnings recession ahead, and recently said that the pullback in lending from banks strengthens his case.

☆ The credit crunch is here and it could cripple the economy. Here's what Larry Summers, Nouriel Roubini and 7 other experts have said on the emerging threat.
▼ + stars: | 2023-04-20 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +6 min

Latest bank lending data suggests the credit crunch "has already started," according to Morgan Stanley strategists. Here's a selection of recent warnings on the emerging threat from experts including Larry Summers, David Solomon, Mike Wilson, Nouriel Roubini and Bill Gross. Apollo Asset Management's Jim Zelter told Bloomberg "it's not a credit crunch" but rather a "transition period" as markets face higher debt costs. "That credit crunch is going to make the likelihood of a recession — a hard landing — much greater than before. "Whether this qualifies as a full-blown 'credit crunch' remains to be seen.

☆ Debt ceiling drama is back and it's coming for markets. Here's what to know as a deadline looms.
▼ + stars: | 2023-04-19 | by ( Max Adams | ) www.businessinsider.com time to read: +6 min

If the trend returns to the upside, it'll buck many of the gloomiest predictions of a crushing earnings recession and a painful stock market sell-off — at least for now. Last week, markets started showing early signs that investors are stressed about a possible US default as the deadline looms without an agreement in sight. Join us in demanding a reasonable negotiation, a responsible debt ceiling, an agreement that brings spending under control" McCarthy said. Here are the latest market moves. Here's why Morgan Stanley's Mike Wilson doesn't believe in the latest stock market rally.

☆ Here's why Morgan Stanley's top equity strategist is staying bearish on stocks despite the latest rally
▼ + stars: | 2023-04-18 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Morgan Stanley's top equity strategist Mike Wilson is staying bearish on the stock market despite the latest rally. Wilson pointed to the potential for disappointing earnings and a tightening Fed as reasons investors should be cautious. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. He believes revenue growth is going to disappoint investors based on recent soft readings in inflation, which signals a decline in demand. 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.

☆ Morgan Stanley stock strategist who called the bear market says we are 'far from out of the woods'
▼ + stars: | 2023-04-17 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +2 min

The bear market still has at least one more big drop for stocks left to go, according to Morgan Stanley's top stock strategist. The S & P 500 has gained in four of the past five weeks and is up more than 7% year to date. The benchmark index is also trading above its 50- and 200-day moving averages, lending support to some investors' belief that the bear market might be nearing its end. .SPX YTD mountain The S & P 500 has rallied in 2023. One key area of concern is that the S & P 500 has exhibiting its worst breadth since at least 2005.

☆ Bank of America's top global strategist warns there's 'plenty of room for more S&P 500 downside' as 80% of recessions since 1933 have torpedoed stocks by 20% after they started
▼ + stars: | 2023-04-15 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Hartnett says S&P 500 EPS will fall by 16% in 2023, compared to the market's view of -4%. Some argue that stocks have already priced in a recession, having fallen 20% in 2022 (though the S&P 500 has rallied 8% year-to-date). He continued: "Plenty of room for more S&P 500 downside…since 1929, 2/3 of the S&P 500 peak-to-trough drawdowns have occurred during, not before, US recessions." So whether we have an economic recession or not it isn't as important as the earnings recession," he said. Most strategists see a more mild decline in store for stocks, and most — including Wilson — see the S&P 500 finishing the year somewhere near 4,000.

☆ Morgan Stanley's US stock chief sees more than 20% downside coming for the S&P 500 and warns of an earnings recession on banking sector turmoil
▼ + stars: | 2023-04-13 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

Morgan Stanley's Mike Wilson backed his forecast for an earnings recession amid banking sector concerns. The equity strategist sees the S&P 500 falling more than 20% before parring losses by year-end. The S&P 500 is up 8% year-to-date, while the Nasdaq Composite has surged 17% in the same time frame. "We're in the earnings recession camp. So whether we have an economic recession or not it isn't as important as the earnings recession," Wilson said.

☆ A 31-year market vet who called the current bear market says the S&P 500 has another 45% downside as investors remain blind to signs that a recession is hurtling toward the US economy
▼ + stars: | 2023-04-08 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

Yet, stock market investors remain bullish, he said. He's been warning of a significant stock market decline since late 2021,"People are ignoring all the lessons of history," Wolfenbarger told Insider on Friday. His bearish outlook stems from how high stock valuations are relative to 10-year Treasury yields. Wolfenbarger also has company in thinking that stock market investors aren't heeding the warnings of a coming downturn. Yet, the stock market doesn't seem to reflect this uncertainty, he said.

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