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S&P 500 Ready to Join Bear Market, Says Morgan Stanley

  • With defensive stocks now expensive, few places to hide: MS
  • Morgan Stanley strategists cite tightening Fed, recession woes
Bloomberg business news
Morgan Stanley's Wilson Sees Signs of Cyclical Slowdown

The S&P 500 is about to drop sharply, Morgan Stanley’s Michael J. Wilson warned, as investors struggle to find havens amid fears of a recession and aggressive tightening by the Federal Reserve. 

“With defensive stocks now expensive and offering little absolute upside, the S&P 500 appears ready to join the ongoing bear market,” said Morgan Stanley strategists in a note on Monday. “The market has been so picked over at this point, it’s not clear where the next rotation lies. In our experience, when that happens, it usually means the overall index is about to fall sharply with almost all stocks falling in unison.”