Morgan Stanley Sees Risks to Stocks From Earnings, Fed
- US stock indexes traded unusually well into earnings season
- Fed hiking while earnings growth falls is historical anomaly
A rally in US stocks leading up to this earnings season presents a near-term risk to equities given the prospect of further Federal Reserve rate hikes and fading profit growth, according to Morgan Stanley’s Michael Wilson.
The S&P 500 rallied more than 6% in the final three weeks of March, in contrast to selloffs in the lead-up to the previous three reporting seasons, and that’s a cause for concern to Wilson — one of the most bearish voices on Wall Street.