Morgan Stanley: A 10% selloff in the stock market is most likely
August 04, 2020 @ 10:40 +03:00
Michael Wilson, chief U.S. equity strategist at Morgan Stanley, and his colleagues believe that the narrow breadth of winners in the stock market will likely result in a 10% correction before giving way to a renewed rally.
The analysts, in a Monday research report, say that either a host of risks that are building beneath the surface of the markets’ unimpeded uptrend — spiking COVID-19 cases, 2020 presidential election uncertainty and nearly unchecked government spending — must be cured or the recent technology-related winners need to fall along with the rest of the market.
The report comes as the tech-heavy Nasdaq Composite Index finished the session up 1.5% to post its 29th all-time closing high of 2020. The index is up nearly 60% from its March 23 low, powered by a handful of large-capitalization companies, including Microsoft Corp. and Tesla as well as from the so-called FAANG names. The Dow Jones Industrial Average and the S&P 500 index are both up by at least 43% since their late-March nadirs, but that pace isn’t as brisk as the Nasdaq because of the latter’s proportion of tech-related shares.
A 10% selloff in the stock market is most likely, says expert who called March lows: ‘Something has to give’, MarketWatch, Aug 4