威尔逊表示，美国股市目前处于自2022年以来的首次超卖状态，市场情绪和仓位指标都已经显示出反弹的信号，美股的季节性趋势料在3月下半月改善。此外，近期美元走软可能提振第一季度的企业盈利，因此① Following the rise of US stocks last Friday, Morgan Stanley expects a short-term rebound in US stocks, but doubts about the sustainability of the rise remain; ② Chief Strategist Wilson believes that the fundamental resistance facing US stocks has not disappeared, and the possibility of a long-term rebound is not great.
Since the S&P 500 Index entered a technical correction Range last Thursday, US stocks clearly rebounded last Friday, with the S&P 500 Index rising 2.13% in one day, recovering some ground.
On Sunday, Eastern Time, Michael Wilson, Chief US Stock Strategist at Wall Street giant Morgan Stanley, predicted that the recent state of US stocks indicates a potential short-term rebound after a significant decline since February – however, they also warn that how long such a rebound trend can last remains unknown.
US stocks may rebound in the short term.
Wilson stated that the US stock market is currently in its first oversold state since 2022, with market sentiment and position Indicators already showing signs of a rebound. The seasonal trend of US stocks is expected to improve in the latter half of March. In addition, the recent weakening of the dollar may boost corporate earnings in the first quarter, hence there is reason to expect a temporary rebound in the market.
However, can this round of rebound last for a long time? Morgan Stanley is skeptical about this.
Wilson wrote in the report: "A more important question is whether such a rise can extend into a more prolonged phase and signify the end of the volatility we have seen this year? The short answer is: probably not."
Wilson stated that although US stocks have potential for a brief rebound recently, from a technical perspective, the technical aspect of the US stock market has already suffered considerable damage, making it unlikely to see a long-term rebound at this stage.
From a technical analysis perspective, the S&P 500 Index, NASDAQ 100 Index, E-mini Russell 1000 Growth Index (RLG), and E-mini Russell 1000 Value Index (RLV) have all fallen below the 200-day moving average, causing this average to now act as Resistance instead of Support. The E-mini Russell 2000 Index, which consists of small-cap stocks, has been particularly hard hit — it has fallen below the 200-week moving average for the first time since the bear market of 2022-2023.
The S&P 500 Index fell to 5505 points last Thursday, reaching the lower limit of the trading Range for the first half of the index previously predicted by Morgan Stanley at 5500 points. However, Friday's market trend indicates that the US stock market has begun to rebound.
Morgan Stanley stated that although this rebound may provide opportunities for short-term increases, the fundamental factors driving the Large Cap pullback have not yet been resolved.
Fundamental Resistance has not vanished.
Despite recent headlines on Wall Street focusing on the Trump administration's new tariff policies and changing economic strategies, Morgan Stanley's strategists believe that the momentum of the economic recession currently facing the USA actually began quietly before Trump took office.
Morgan Stanley believes that the current pullback in the US stock market has long been foreshadowed: for example, as early as December last year, US stock valuations were already too high, and the Federal Reserve temporarily halted rate cuts after significantly lowering interest rates, while the dollar strengthened at the end of last year — these last two factors have stressed earnings expectations for the fourth quarter Earnings Reports season.
In addition, the technology giants that have dominated the performance of the US stock market in recent years are facing new challenges. It is anticipated that growth in AI capital expenditure will slow down by 2025, negatively impacting some of the largest Technology stocks.
Meanwhile, Morgan Stanley believes that the USA's expanding fiscal deficit is expected to weigh on future economic growth. In the fourth quarter of 2024, the US fiscal deficit surged by 40% compared to the same period last year.
What makes matters worse is the uncertainty of Trump's policies—such as tariffs and the impact of the USA Government Efficiency Department (DOGE)—which also casts a shadow over the outlook.
Morgan Stanley stated, "Moreover, factors such as immigration enforcement, DOGE, and tariffs have also struck the US stock market, so it’s not surprising."
Is 2025 still looking grim?
Therefore, looking toward the rest of 2025, Morgan Stanley believes that although the US stock market may experience a short-term rebound temporarily, caution should still be exercised regarding the market's ability to sustain a long-term recovery.
They believe that expectations for US economic growth are declining, which will lead to a decrease in US stock valuations. For the US stock market to show a sustained positive trend in the future, it may take a few more quarters.
"Most importantly, after Friday's price movements, the likelihood of a short-term rebound from the bottom of the 5500-6100 Range is greater," Wilson said, "This (the rally last Friday) was also led by low-quality stocks, which supports my view that the current rebound is unlikely to reach new highs unless many growth resistance factors are reversed or monetary policies are loosened again."
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Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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