Strategists at Morgan Stanley indicated that the recent pullback in the S&P 500, triggered by conflict in the Middle East, is approaching its conclusion.
In a recent report, the strategists noted that the forward price-to-earnings ratio of the S&P 500 has declined by 17%.
Market expectations for rising oil prices have already been priced in.
Among the constituents of the Russell 3000 Index, more than half have experienced declines exceeding 20%.
A team led by Mike Wilson stated that they continue to see signs suggesting the pullback is closer to its end rather than its beginning.
Rising bond yields pose a risk, with the 10-year U.S. Treasury yield nearing 4.5%, a level that has historically exerted pressure on stock valuations.
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