S&P 500 Could Drop Another 5%-7% Before Bottoming, Says Morgan Stanley's Chief Investment Officer: Report
Synopsis
According to a Business Insider report, Mike Wilson expects another pullback before a more sustainable recovery emerges.
U.S. equities could reportedly face additional turbulence in the coming weeks, according to Morgan Stanley. The firm warned that the benchmark S&P 500 may slide further before a sustained recovery takes hold, even as long-term fundamentals remain supportive for stocks.
According to a Business Insider report, Mike Wilson, chief investment officer and chief U.S. equity strategist at Morgan Stanley, believes the market has not yet reached the bottom of the current downturn. He suggested the S&P 500 might retreat by roughly 5% to 7% over the next month before stabilizing.
"While much of the damage has likely been done to the most vulnerable parts of the equity market, the index remains vulnerable to another 5%-7% downside in my opinion, while crowded stocks could see double digit declines before a final low appears next month.”
-Mike Wilson, CIO, Morgan Stanley
Retail sentiment toward the SPDR S&P 500 ETF (SPY) was in the ‘bearish’ territory at the time of writing.
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