Morgan Stanley Analysts Say Bearish Forecast for Equities Hasn’t Changed trendswire
Morgan Stanley’s top US equity strategists told Bloomberg Television on Friday that the company’s bearish stock market prediction has not changed despite recent gains in major technology stocks.
“The call hasn’t really changed,” the strategists said.
They explained that the “heated rally” in the fourth quarter was led by the “old economy”, including finance, industry, energy and materials, and was based on China’s reopening story, “which was legitimate”.
“Tech stocks obviously disappointed in the quarter,” they said. But now, they notice that “technology obviously goes to the moon,” and now this rally is loved because it’s what people want to buy and own.
However, Morgan Stanley would characterize this as the bear market continuing. The strategists commented that “This is what bear markets do.”
“They are designed to trick you, confuse you, make you do things you don’t want to do,” they added. “We think the main driver of this year’s rally has been increased liquidity.”
As a result, analysts said the firm believes the fundamental case does not support where the shares are currently trading and that the second half “will likely be a bit more choppy and to the downside” on the .