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Morgan Stanley Sees Earnings Risks Weighing on Stocks

  • Companies slow to guide down in the absence of recession: MS
  • Strategist says bear market may end in next earnings season
Updated on

Weakening corporate profit forecasts may provide the latest headwind to US stocks, which are likely to fall further before bottoming during the second-quarter earnings season, according to Morgan Stanley strategists.

“In the absence of an obvious shock like a recession, companies are slow to guide down,” strategists led by Michael Wilson wrote in a note on Monday. “This time should be no different, which means stocks can hang around current levels until the second-quarter earnings season when the next leg lower is likely to begin and end.”