The present bounce in US stocks, according to one of Wall Street’s most well-known bears, will last until the sell-off returns.
According to Morgan Stanley strategists led by Michael Wilson, the S&P 500 could increase by another 5-7 percent before it begins to lose ground again.
Wilson sees US benchmark near 3,000 points in recession
The decrease in bond yields and oil prices, which also helped the benchmark index end a three-week losing streak, “we anticipate US equity markets could continue to increase,” strategists wrote in a note.
Although it would appear so for the next few weeks, the bear market is still ongoing as markets interpret lower rates as a sign that the Fed might conduct a gentle landing and avert a significant reduction to earnings projections, according to him.
Wilson predicts that the S&P 500 will bottom between 3400 and 3500 index points or 13% below its most recent close. In the event of a recession, the index will decline by more than 23% to roughly 3000 points.