Source: Wall Street
Michael J. Wilson, a strategist at Morgan Stanley, said he "does not rule out" that the S & P 500 rose to about 4150, but said a rebound could not be achieved if the index failed to maintain its 200-week moving average.
With global inflation and interest rates as a whole still rising, many economies facing recession and supply chains and corporate profit margins under pressure, there are many negative factors for investors.
Still, Michael J. Wilson, a strategist who has long been bearish on the stock market, said U.S. stocks are ripe for a short-term rebound in the absence of falling earnings or an officially declared recession.
Wilson wrote in a report on MondayThe s & p 500 is down 25% this year and is testing the "important support bottom" of its 200-week moving average, which could trigger a technical rebound.
Wilson, one of the most famous bears on Wall Street, accurately predicted the collapse of US stocks this year.He said he "does not rule out" that the S & P 500 rose to about 4150, meaning the index could be up 16% from its recent close.
"this seems to be a very big volatility, but it is in line with the rebound in bear markets this year and in the past," he said.
It is worth noting that Wilson still maintains a long-term overall negative view of U. S. stocks.
He said he thought US inflation had now peaked and "could fall back quickly next year", but said he expected "corporate profits to slow significantly" over the next 12 months.
Wilson also warned that although the S & P 500 usually takes a "full-blown recession" to fall below its 200-week moving average,If the index fails to hold that level this time, the rebound may not be achieved at all. Instead, the index could fall to 3400 or less, at least 5 per cent below Friday's closing price.
He predicts that the bear market will eventually hit bottom around 3000-3200.
The views of Goldman Sachs Group and other institutions
Goldman Sachs Group strategist pointed out thatTaking into account interest rates, the S & P 500 is still high compared to historical data.Strategists, including David J. Kostin, wrote in a report on Oct. 14 that they found stocks related to rapid generation of cash flow, value stocks, earnings growth, cyclical stocks and small-cap stocks attractive.
In addition, relevant economic studies show thatHistory suggests that the bear market in US stocks may be far from over.
The s & p 500 has fallen 25% in more than nine months since its peak in January, a smaller and relatively short decline compared with a similar decline in the last century, according to the study.
During bear markets in history, on average, the s & p 500 fell about 38% in 15-16 months before hitting bottom.
Edit / roy