All rights reserved. we believe that investors should favor companies that can deliver higher earnings growth than what’s already priced. We have global expertise in market analysis and in advisory and capital-raising services for corporations, institutions and governments. At today's prices, the S&P 500 is trading at an equity risk premium of 380 basis points. When I cross paths with these former colleagues, it’s always very rewarding personally. Morgan Stanley equity strategist Mike Wilson joined CNBC's "Squawk Box" to discuss what he thinks is in store for markets for the rest of 2020. One thing that's certain about this pandemic is that many things we used to take for granted are likely to be different going forward. Two weeks ago, the index failed to break through that level for the second time. U.S. announces new Nagorno-Karabakh ceasefire as fighting persists, Netflix Is Finally Starting To Slash Its Astronomical Content Costs, Britain’s New Spy Chief Says China’s “Covert Activities” Biggest Long-Term Threat, Powell Lays Out The Key Reasons Why The Fed Is Moving Toward Digital Dollars, https://www.youtube.com/watch?v=YshdemM-QTs, How The DoJ’s Anti-Trust Lawsuit Against Google Could Hammer Apple At A Critical Time, Chargers have mixed feelings about Justin Herbert running more, Senate votes to confirm Amy Coney Barrett to Supreme Court, Brazil may file complaint vs. Philippines over poultry import ban, Senate Confirms Judge Amy Coney Barrett to the Supreme Court, Trump remakes Supreme Court as Senate confirms Amy Coney Barrett, U.S. Senate votes to confirm Supreme Court pick Barrett, CBCP defends Pope Francis over support for same sex civil unions, Senate Votes To Confirm Judge Barrett, Here Are The Democrats’ Worst Proposals To ‘Reform’ SCOTUS, UK study finds evidence of waning antibody immunity to COVID-19 over time, Economists call for improved spending transparency as Trudeau again refuses to set fiscal anchor, U.S. Supreme Court will not allow extension in Wisconsin mail-in ballot deadline, CDC Reaffirms Warning Against Nonessential Travel, Including Cruises, LA County, city rolls out pilot program to respond to mental health crisis calls, Watch People Swim Through School Of Salmon Patrolled By Sharks, Al Qaeda #2 Commander Killed In Secretive Raid In Afghanistan, Committee bid to unearth Trudeaus’ WE Charity speaking contracts fails when Bloc MP votes ‘no’ by mistake, Watch Live: Senate Votes to Confirm Judge Amy Coney Barrett for Supreme Court. We recommend taking advantage of any near-term correction in the headline index to add to investments in areas that are likely to be the biggest beneficiaries of the economy reopening further next year. Trump to escalate campaigning as Biden steps up own travel, Plan to give Santa Claus performers early COVID-19 vaccine scrapped, Like Margot’s steal attempt, Rays come up short in Game 5, Zeta likely hurricane before hitting Yucatan, heading for US. Coming to New York from the Midwest to work at Morgan Stanley was a massive change for me culturally. Michael Wilson, chief U.S. equity strategist at Morgan Stanley, warns savvy investors to prepare for a quick 10% correction before giving way to a renewed rally. Watch Morgan Stanley's Mike Wilson explain why stocks will push higher from here. Morgan Stanley equity strategist Michael Wilson said Tuesday that he doesn’t want to see a dramatic rebound from stocks on Wednesday, saying the … University of Michigan. It’s also holding up the next round of fiscal stimulus. Your email address will not be published. Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article. Chief Investment Officer Mike Wilson explains. businesses and services that have not been able to operate normally may provide better investments at this time primarily because expectations remain low and wallet share gains are likely. This political uncertainty along with the arrival of the second wave of COVID-19 has pushed equity volatility higher and the S&P 500 […] Chanos just earned nine-figures by shorting Wirecard ahead of its collapse, according to sources cited in the FT story. This technical failure is not the end of the bull market, but it does suggest to me that the correction that began in September probably is incomplete. From Michael Wilson, Morgan Stanley chief US equity strategist With just one week to go until the US elections, the outcome remains uncertain. as well as financials and other cyclicals. We value our commitment to diverse perspectives and a culture of inclusion across the firm. But that just means expectations are already high. From a technical perspective, I have been watching a key resistance area for the S&P 500 since early September that comes in around 3550. © 2020 Morgan Stanley. Sun, 10/25/2020 – 18:00. Tuesday, 04 August 2020 09:03 AM. At Morgan Stanley, we lead with exceptional ideas. It does not consider your financial circumstances and objectives and may not be suitable for you. Ive been an investment banker, a salesman, a trader, a strategist and a product manager. “We think the most likely outcome remains a 10% correction in the broader index led by the beneficiaries before the recovery and bull market continues,” wrote Wilson and strategists Adam Virgadamo, Andrew Pauker and Michelle Weaver. While that's a headwind for fixed-income investments and stocks levered to lower interest rates, it's also an opportunity for stocks levered to higher rates, which includes those same infrastructure beneficiaries as well as financials. With the re-valuation of equities largely over at this point, we believe that investors should favor companies that can deliver higher earnings growth than what’s already priced. Listen to his most recent episode and check out those of his colleagues from across Morgan Stanley Research. In contrast, businesses and services that have not been able to operate normally may provide better investments at this time primarily because expectations remain low and wallet share gains are likely. It’s also holding up the next round of fiscal stimulus. We also think such spending will prove to be more inflationary than what the bond market is currently anticipating. Welcome to Thoughts on the Market. Michael Wilson is chief investment officer of Morgan Stanley Wealth Management and Morgan Stanley & Co. and chief US equity strategist for Morgan Stanley & Co. As CIO and chair of the Global Investment Committee, Mike is responsible for all the investment and asset allocation advice provided to the firm’s $2.1 trillion in retail client assets. With a U.S. fiscal stimulus deal looking more likely, the risk of long-term interest rates moving higher has now increased—a shift that could benefit recovery stocks. At Morgan Stanley, we lead with exceptional ideas. Our firm's commitment to sustainability informs our operations, governance, risk management, diversity efforts, philanthropy and research. We provide comprehensive workplace financial solutions for organizations and their employees, combining personalized advice with modern technology. Our board of directors and senior executives hold the belief that capital can and should benefit all of society.