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Morgan Stanley: Expectations of Fed Rate Cut to Drive S&P 500 Index Higher
Summary: In a recent report, Morgan Stanley's Chief Equity Strategist Mike Wilson pointed out that the stock market's rise since April has been primarily driven by fundamentals. Despite possible short-term consolidation, Wilson remains optimistic about the market's outlook for the next 6-12 months, citing factors such as improving corporate earnings and increasing expectations of a rate ...
In a recent report, Morgan Stanley's Chief Equity Strategist Mike Wilson pointed out that the stock market's rise since April has been primarily driven by fundamentals. Despite possible short-term consolidation, Wilson remains optimistic about the market's outlook for the next 6-12 months, citing factors such as improving corporate earnings and increasing expectations of a rate cut. The firm believes three main factors will support the upward trend: Earnings improvement, with EPS revision rates rising from -25% in April to -5%, providing further support for stock indices; Expectations of a rate cut, with Morgan Stanley predicting a total of seven rate cuts by 2026; and Reduced risks, as falling oil prices and easing policy/geopolitical risks significantly reduce concerns about an economic downturn. Wilson stated that the current environment favors a broad market rally, with the market shifting from high-quality large-cap stocks to a wider range of stocks, and interest rate risks currently manageable.
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Link: Morgan Stanley: Expectations of Fed Rate Cut to Drive S&P 500 Index Higher [Copy]
