Morgan Stanley Strategists Say Stocks Ignore Fed, Earnings Reality
- Strategist expects bear market bottom to be reached in spring
- Fed hikes during an earnings recession will spur more declines
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US stocks are ripe for a selloff after prematurely pricing in a pause in Federal Reserve rate hikes, according to Morgan Stanley strategists.
“While the recent move higher in front-end rates is supportive of the notion that the Fed may remain restrictive for longer than appreciated, the equity market is refusing to accept this reality,” a team led by Michael Wilson wrote in a note.