Concerns About Stock Markets from Morgan Stanley

Short-Term Risks in Morgan Stanley Analysis

Michael Wilson, a leading analyst from Morgan Stanley, one of the major financial giants based in the US, emphasized that the stock markets will follow a cautious path in the short term due to the current US-China trade tensions and the slowdown in corporate profits. The analyst noted that the S&P 500 index has not yet recovered from the losses experienced during past trade disputes.

Signs of Weakness in Credit Markets

Wilson pointed out that following the credit troubles of two regional banks, weak signals have been observed in the debt markets as well. According to the analyst, without a clear trade easing from either side, it is difficult to completely eliminate risks in the markets without stability in earnings per share forecasts and an increase in liquidity.

Impact of Trade Disputes

Wilson projected that if trade disputes are not resolved by the end of November, there could be a decline of up to %11 in US stocks. However, the analyst maintained the expectation of a gradual economic recovery in the next 6 to 12 months, stating that the decline in profit revisions is considered a seasonal and temporary situation.

Oppenheimer Strategy and Stock Market Performance

On the other hand, Oppenheimer's Chief Investment Strategist John Stoltzfus reminded that S&P 500 companies have increased their profits by %16 so far, surpassing the %12 estimates. Stoltzfus mentioned that this situation will provide resilience and robustness to the stock markets, which is seen as a promising signal for investors.