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{"id":16768,"date":"2022-01-26T10:07:52","date_gmt":"2022-01-26T10:07:52","guid":{"rendered":"https:\/\/thecorporatemagazine.com\/?p=16768"},"modified":"2022-01-27T03:58:49","modified_gmt":"2022-01-27T03:58:49","slug":"mike-wilson-of-morgan-stanley-warns-stocks-will-plunge-another-10","status":"publish","type":"post","link":"https:\/\/thecorporatemagazine.com\/mike-wilson-of-morgan-stanley-warns-stocks-will-plunge-another-10\/","title":{"rendered":"Mike Wilson of Morgan Stanley warns stocks will plunge another 10%"},"content":{"rendered":"\t\t

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\u2018Double down\u2019 on defense as the stocks will plunge another 10%, Morgan Stanley's Mike Wilson warns<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\t\t\t\t $\"Mike$ \t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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January 26, 2022: -Investors may be playing with fire. According to Morgan Stanley’s Mike Wilson, the S&P 500 is vulnerable to a 10% plunge despite Monday’s late buying binge. He is warning investors are dangerously downplaying a collision amid a tightening Federal Reserve and slowing growth.<\/p>
“This type of action is just not comforting. I don’t think anybody is going home feeling like they’ve got this thing nailed even if they bought the lows,” the firm’s chief U.S. equity strategist and chief investment officer told CNBC.<\/p>
Wall Street has not seen an intraday reversal this large since the 2008 financial crisis. In a Monday’s session, the Nasdaq bounced back from a 4% drop while the Dow was off 3.25% at its low. At one point, the blue-chip index was decreased to 1,015 points. But by the close, the Nasdaq, Dow, and S&P 500 were all in positive territory.<\/p>
Wilson, the market’s most giant bear, expects the painful drop will happen within the next three to four weeks. He is anticipating challenging earnings reports and guidance will give investors a wake-up call regarding the slow growth.<\/p>
“I need something less than 4,000 to get constructive,” said Wilson. “I do think that’ll happen.”<\/p>
His strategy was that the Double down on defensive trades ahead of the predicted setback. He warned virtually every S&P 500 group will see more trouble because of the frothiness and makes decisions on a stock-by-stock basis.<\/p>
“We’re not making a big bet on cyclical here such as we were a year ago because growth is decelerating. People got too excited on these cyclical parts of the market, and we think that’s wrong-footed,” he said. “There’s going to be a payback in demand this year. We do think margins are a potential issue.”<\/p>
Wilson doubts the Federal Reserve’s two-day policy meeting, which kicks off Tuesday, will provide meaningful comfort to investors.<\/p>
On Monday, the S&P 500 closed at 4410.13, 8.5% less than the index’s all-time high hit on January 4. Wilson’s\u00a0 year-end price target is 4,400.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t Next<\/span>London police will investigate alleged Downing Street lockdown parties<\/span><\/span>