2023-08-21 14:16:00
Equity strategists at Morgan Stanley said it would be difficult for the S&P 500 to follow higher as investors begin to question how long the U.S. economy’s resilience will last. Photo taken in March 2022 (2023 REUTERS/Brendan McDermid)
(Archyde.com) – The S&P 500 is up just under 14% this year as investors begin to question how long the U.S. economy’s resilience will last, Morgan Stanley stock strategists said. He said it would likely be difficult for seeds to follow higher prices.
Equity strategists at Morgan Stanley, led by Michael Wilson, said one of the factors that makes it harder to follow higher prices is the market’s “fact sell” mentality after the second quarter of 2023 results. “It’s very difficult to be bullish on the S&P 500,” he said.
The S&P 500 is now down more than 5% from its yearly high in July. The 10-year US Treasury yield, a benchmark for long-term US interest rates, hit its highest level since October last year.
“Although the downside is limited, recent price action points to a change of pace, suggesting stocks are beginning to question the sustainability of the economic resilience seen earlier this year,” Wilson said. “As an aside, earnings in financial statements have not caught up with economic trends, except in some areas.”
Wilson also said consumer discretionary stocks are in a vulnerable position as the tailwinds from over-savings are waning.
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