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Morgan Stanley’s chief investment officer and chief US equity strategist, Mike Wilson, is issuing a warning on the stock market.
Wilson says in a CNBC interview that the stock market rally currently being experienced is unlikely to last long.
“It’s going to remain volatile through the end of the second quarter. So whatever rally we’re getting now, we think probably ends up fading into earnings into May and June, and it will probably make a more durable low later in the year.”
According to Wilson, fundamental factors are driving the stock market lower.
“At the end of the day, I mean, everybody’s talking about tariffs right now. But the reason the markets are lower over the course of the last three or four months has nothing to do with tariffs. It’s mostly to do with the fact that earnings revisions have rolled over, the Fed stopped cutting rates, you had stricter enforcement on immigration, you have DOGE (Department of Government Efficiency). All those things are growth-negative. And then tariffs is just kind of the final piece that kind of got people really kind of bearish at the end.”
The Morgan Stanley chief investment officer further says that President Donald Trump’s presumed nonchalance over the stock market has had a negative impact.
“And I would say the thing that really got the S&P going down at the very end was when it became clear that the [U.S.] President does not care about the stock market, at least for now. And that that, you know, lack of a Trump put was like really new news to people.”
The S&P 500 is down by around 6% from the all-time high of 6,147 points reached on February 19th.
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