Why can a bear market turn into a bull market?
2022.11.21 07:17
Why can a bear market turn into a bull market?
Budrigannews.com – Morgan Stanley’s equity strategy remains optimistic about U.S. stocks until the end of this year. They believe that a bear market rally has a higher chance before “deteriorating fundamentals take us to lower lows in the bear market next year.”
Strategies prefer to focus on technical indicators for today, and also continue to treat the breadth of the market as a key reason for maintaining a bullish mood in the future. Last week, they surprised many by saying that in the first quarter of 2023, the price could reach a minimum of 3000-3000 dollars.
We have received sufficient refutation that our forecasts in this direction are too aggressive both in scale and in terms of timing. Despite the bearish mood, many investors find it difficult to expect even repeated tests at 3500. In our opinion, what the lows estimated in October was the peak hawkish position of the Fed and not a significant decline in profits,” the strategists explained in the client report.
MorganStanley predicts a 15-20% decrease in EPS estimates, which will “require more recessionary types of 13, 5-15 times increase with significantly lower EPS.”
If the Fed decides to raise the rate, they believe that stock markets “can benefit from late cycles of “trade increases,” which are usually 15.” However, in this case, the shares will not get a boost from the “reduction to recession” deal, which, according to strategists, costs another $ 10.
