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Joe Rizzuto
May 27, 2023 8:07AM ET
dead wrong since last october
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👀 Bezos, Buffett & Berkowitz: What's in Their Portfolios? Unlock Data
Morgan Stanley analysts say bearish equity call unchanged
Published May 26, 2023 11:48AM ET
© Reuters. Morgan Stanley analyst says bearish equity call unchanged
Morgan Stanley's chief US equity strategists told Bloomberg Television on Friday that the firm's bearish equity market call hasn't been altered despite the recent rise in major technology stocks.
"Our call really hasn't changed," said the strategists.
They explained the "heated rally" in the fourth quarter was led by the "old economy," including financials, industrials, energy, and materials, and was based on the China reopening story, "which was legitimate."
"Technology stocks obviously disappointed in the quarter," they stated. But now, they note that "tech is obviously going to the moon," and now this rally is loved because this is what people want to buy and own.
However, Morgan Stanley would characterize this as the bear market continues. The strategists commented that "This is what bear markets do."
"They are designed to fool you, confuse you, make you do things you don't want to do," they added. "We think the overriding driver of this year's rally has been increased liquidity."
As a result, the analysts said the firm believes the fundamental case does not support where stocks are currently trading and that the second half is "probably going to be a bit choppier and downward" in the S&P 500.
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Comments (4)
Benjamin USA
May 26, 2023 12:59PM ET
Huh
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Prakash Raja
May 26, 2023 12:26PM ET
Already 30 % up NASDAQ. and some stocks have given 100-250 % move from lows. and u call this bear market ? non sensical! :-)
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Maurizio Ciocca
May 26, 2023 12:26PM ET
It's not uncommon at all to see such moves instead. NVIDIA itself gained +136% from the beginning of 2000-2002 bear market, before crashing -75% by the end of it.
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Prakash Raja
May 26, 2023 12:26PM ET
Maurizio Ciocca thats a different scenario. here most good stocks in nasdaq fell by 50 to 70 % of its range (retracement) last year indicating the end of bear market for NASDAQ. at best there can be consolidation between 11500 to 14200 band for NASDAQ. i dont foresee any bear market for NASDAQ. if 13700 + happens then bear is done and thru'
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Maurizio Ciocca
May 26, 2023 12:26PM ET
I have no crystal ball so that's plausible too. Just cautioning here because schizophrenic moves like these are not very typical of healthy, organic bull markets. Not to mention the macro backdrop, but yeah.. the narrative of the soft landing is always valid until it's not and all the res flags are there.
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Prakash Raja
May 26, 2023 12:26PM ET
Maurizio Ciocca as per Elliott Wave, when nasdaq was 11000 or so, i did say 13300-500 possible. for SP 500 around 4450-4500 possible. fundamentally all negative news are factored in, last yrs 25 % fall in SP 500. So even if a mild to moderate recession were to happen, its NO big deal for indices. they can at best consolidate. CPI has cooled a lot from 9 % to 4.9 % and can be 4 % and sub 4 % in next 2-3 months using simple calculations based on MoM estimates % rise. So i do not foresee anything red as of now unless something comes up in the future bro :-)
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A_Jaundiced_Eye
May 26, 2023 11:53AM ET
Remember: a bear market starts when the last bear throws in the towel. As long as Morgan Stanley is bearish, the market WON'T crater.
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