A top expert has revealed the date of the end of the bearmarket. When will we finally see a turnaround? Morgan Stanley
Slumps are a natural part of the market. But we are all probably eagerly awaiting the end of this year's. And in the flood of pessimistic views comes an analyst from Morgan Stanley who believes the end of the bearmarket is coming soon! When?
With US stocks down more than 20% this year, investors are looking for good news. And that's exactly what an analyst from Morgan Stanley has come up with. What does he say?
In an interview with Bloomberg Television, Mike Wilson, the firm's equity strategist and chief investment officer, predicted that the bear market in U.S. stocks could end by early 2023. Investors are taking this seriously because Wilson, who is usually extremely skeptical of the market, recently won a prestigious award for best institutional investor.
"We think ultimately the bear market will probably end sometime in the first quarter," Wilson said in the broadcast.
https://www.youtube.com/watch?v=JLZjM5D_lRk
On the other hand, Wilson seems to be taking a view that is quite the opposite of what other Morgan Stanley analysts are telling clients. Lisa Shalett, the wealth management firm's chief investment officer, wrote on their website in late September that "Morgan Stanley's global investment committee believes this bear market is far from over."
Wilson, however, stands by his opinion.
He cited the 200-week moving average of the S&P 500 as his leading indicator. This indicator stood at 3,612 points at the end of October. On 30 November, the S&P 500 index closed above its 200-week moving average for the first time since 7 April. As long as the index remains above this average, stocks could recover and reach the 4 150-point level. However, if the index breaks the 200-week barrier, investors should take that as a signal to start selling, according to Wilson.
And apparently, he really believes this indicator. In fact, he said, "The 200-week moving average is an extremely strong technical support level for stocks, especially if there is no outright recession, which we don't have yet."
This indicator is watched closely by almost everyone.
https://www.youtube.com/watch?v=VFJAcCo41w4
That would be quite a relief for investors. After all, it was at 4,800 points at the beginning of the year. From there, it dropped slightly below 3,500 points in the first weeks of October and then climbed back up to around 3,800 points. In November it recovered almost to 4,000. If this current upward trend remains steady, the bear market will end during the first quarter of 2023, according to Wilson.
However, it could still be influenced by factors such as the well-known Santa Claus Rally, or the release of Q4 results, which is just around the corner again.
What do you think? Is Wilson right and will there really be light at the end of the tunnel in early 23 or will we have to wait for relief?
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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources (YTB, Morgan Stanley). Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.
