Morgan Stanley’s Wilson Says Bond Market, S&P 500 Too Sanguine
- Strategist says cyclical stocks are looking most vulnerable
- Vocal bear says Fed may not be in position to complete hikes
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Bond markets and the S&P 500 are too sanguine about the economic outlook, according to Morgan Stanley’s chief U.S. equity strategist.
“We have another example of extreme divergence between the internals of the stock market which are strongly indicating a growth scare, while bonds and the S&P 500 are suggesting growth is not only ok, but likely to remain robust in the case of bonds,” Michael Wilson and his team wrote in a note to clients on Monday. This deviation will prove unsustainable, and cyclical stocks are the most vulnerable when it’s eventually resolved, they said.