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- Morgan Stanley strategist says bear market could start next year after a surge higher
Morgan Stanley strategist says bear market could start next year after a surge higher
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Loading...Morgan Stanley's Mike Wilson expects the S&P 500 to reach 2,700 early next year, but there could be a 'bear market' correction shortly after that. Wilson said a correction, which could start in the second half of next year, could take the S&P 500 down 20 percent, Wilson said. Wilson sees the potential for a pullback of 5 to 6 percent this fall.
A correction of that magnitude would be a normal thing for a market that has been in an eight year bull run. While he expects to see investors get much more excited by the market before it tumbles, it may not be like other periods, given the deep scars from the financial crisis.
"We probably won't see the euphoria we saw in the late '90s any time soon. The scar tissue is still too thick," he said.
Wilson said Congress looks set to move ahead with stimulus even though at this point the market does not need it.
In the meantime, stocks are benefiting from strong earnings, a still-easy Fed and the promise of economic stimulus.
Source: CNBC
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