The chief U.S. equity strategist at Morgan Stanley says that the S&P 500 is at risk of falling 10% from its high reached a week ago. The benchmark gauge just failed for a second time in as many months to break out a long-term trend line that had marked the market’s peaks over the past four decades.
Adding to the chart’s hurdle, Wilson says, is a long list of macro headwinds ranging from stalled fiscal talks, rising Covid-19 cases and the looming presidential election. All are bound to whip up market volatility, making investors less willing to pay up for stocks.
“With so many uncertainties over the next month, we think another 10% correction from Monday’s highs is the most likely outcome in the near term before this bull market can resume, at least at the index level,” Wilson wrote in a note to clients. #stocktalk
Adding to the chart’s hurdle, Wilson says, is a long list of macro headwinds ranging from stalled fiscal talks, rising Covid-19 cases and the looming presidential election. All are bound to whip up market volatility, making investors less willing to pay up for stocks.
“With so many uncertainties over the next month, we think another 10% correction from Monday’s highs is the most likely outcome in the near term before this bull market can resume, at least at the index level,” Wilson wrote in a note to clients. #stocktalk