Morgan Stanley is betting big on the S&P 500, predicting it will hit new all-time highs within the next year. They don’t think the market will revisit its April lows.
Why the Optimism?
According to Andrew Sheets, Morgan Stanley’s global head of corporate credit research, several factors are driving this bullish outlook:
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Improved Earnings: Sheets believes the market has already factored in a potential recession and is now looking ahead to better earnings growth. Earnings revisions are already showing improvement.
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Weak Dollar: A weaker US dollar is expected to boost corporate earnings, providing a further tailwind for the market.
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Fed Rate Cuts: The Federal Reserve is anticipated to cut interest rates over the next year. Historically, when this happens without a recession, the market’s valuation multiples don’t typically fall.
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No Recession Expected: Morgan Stanley doesn’t foresee a recession on the horizon.
The Prediction
Sheets projects the S&P 500 reaching 6,500 by mid-2024. As of Tuesday’s close, the index stood at 6,038 points, representing a potential near 8% increase. This prediction is based on the belief that the market is already pricing in negative factors and is poised for a strong upward trend.
Disclaimer: This information is for general knowledge and shouldn’t be considered investment advice. Always conduct your own research before making any investment decisions./p>
