Morgan Stanley Predicts S&P 500 Rally, Says Three Catalysts To Drive Next Leg Up: Report
Morgan Stanley chief investment officer Mike Wilson is reportedly predicting that US stocks are not done rallying in 2025.
Wilson says in a note to investors that the S&P 500 will likely continue putting up gains for the remainder of the year, reports Investing.com.
He believes that the Federal Reserve will cut rates, adding liquidity to the market, and company earnings will exceed expectations, sending stocks higher.
“Equity markets have been resilient since bottoming in April, and the rally has been more fundamentally driven than many appreciate…
We remain bullish on a six-to-12-month horizon as EPS (earnings per share) tailwinds expand, and the market has line of sight to Fed cuts.”
Wilson says a third catalyst behind a likely continued stock market rally is the decline in broader policy and geopolitical risks.
One metric Wilson uses to predict a bullish market is the earnings revisions breadth, or the proportion of analysts who have raised their estimates minus the proportion who have lowered them.
The earnings revisions breadth has increased from a low of -25% in April to -5% currently, providing “fundamental justification” for equity growth, Wilson says. He adds that similar changes in the past have resulted in stronger earnings.
“This series leads EPS surprise.”
Wilson also says that stocks will likely trade higher ahead of expected Fed rate cuts later this year.
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Featured Image: Shutterstock/PHOTOCREO Michal Bednarek/Nikelser Kate
The post Morgan Stanley Predicts S&P 500 Rally, Says Three Catalysts To Drive Next Leg Up: Report appeared first on The Daily Hodl.
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Morgan Stanley Predicts S&P 500 Rally, Says Three Catalysts To Drive Next Leg Up: Report
Morgan Stanley chief investment officer Mike Wilson is reportedly predicting that US stocks are not done rallying in 2025.
Wilson says in a note to investors that the S&P 500 will likely continue putting up gains for the remainder of the year, reports Investing.com.
He believes that the Federal Reserve will cut rates, adding liquidity to the market, and company earnings will exceed expectations, sending stocks higher.
“Equity markets have been resilient since bottoming in April, and the rally has been more fundamentally driven than many appreciate…
We remain bullish on a six-to-12-month horizon as EPS (earnings per share) tailwinds expand, and the market has line of sight to Fed cuts.”
Wilson says a third catalyst behind a likely continued stock market rally is the decline in broader policy and geopolitical risks.
One metric Wilson uses to predict a bullish market is the earnings revisions breadth, or the proportion of analysts who have raised their estimates minus the proportion who have lowered them.
The earnings revisions breadth has increased from a low of -25% in April to -5% currently, providing “fundamental justification” for equity growth, Wilson says. He adds that similar changes in the past have resulted in stronger earnings.
“This series leads EPS surprise.”
Wilson also says that stocks will likely trade higher ahead of expected Fed rate cuts later this year.
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Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/PHOTOCREO Michal Bednarek/Nikelser Kate
The post Morgan Stanley Predicts S&P 500 Rally, Says Three Catalysts To Drive Next Leg Up: Report appeared first on The Daily Hodl.
Read More
S&P 500 Could Go As High as 6,600 This Year After Shrugging Off ‘Five Shocks in Five Years,’ According to Fundstrat’s Tom Lee