By Dana Sanchez
Morgan Stanley: Expect Stocks To Fall 20 Percent In Destructive Outcome For Bull Market
Morgan Stanley says it’s looking more likely stocks fall 20% in ‘destructive outcome’ for bull run
Some deteriorating market indicators and the end of major pandemic relief programs suggest a coming plunge of more than 20 percent in U.S. stocks as the economy returns to a more normalized pace. The transition could be rougher than many expect, according to Morgan Stanley, which is considered more bearish than most Wall Street strategists.
In a note to clients, chief US. Morgan Stanley Equity Strategist Mike Wilson said that the market is at a fork in the road with one road leading to “fire” and the other to “ice,” . The market appears to be heading down the ice path.
“The ‘ice’ scenario is starting to look more likely, and could result in a more destructive outcome – i.e. a 20%+ correction,” the note said.
The “fire and ice” debate, inspired by the Robert Frost poem — “Some say the world will end in fire;
Some say in ice” — originated in the late 1990s between two Morgan Stanley researchers. On one side of the debate, Barton Biggs took the position that Click here to read entire article