Morgan Stanley’s Wilson Sees 20% Downside for Tech Stocks

Bloomberg2023-03-08

‘Even the cyclical names that have gone too far’ could tumbleLack of cash coming in the door is an earnings vulnerabilityMorgan Stanley’s Michael Wilson says he still sees some 20% downside on some of...

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LSH007
2023-03-08
LSH007
I missed the October 2022 bottom, so I'm hoping that Wilson is correct and I can buy when the 20% correction happens
Bodoh
2023-03-08
Bodoh
Ooops

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He said that he could see some firms going bankrupt.While he said in a note Monday that he’s expecting stocks to rally in the short term, he still warns that the S&P could test the October low as fundamentals deteriorate. The S&P 500 has risen 5.4% this year, while the technology laden Nasdaq 100 has surged more than 12%.Wilson was ranked No. 1 in last year’s Institutional Investor survey after correctly predicting the selloff in stocks in 2022. In October, he correctly forecast a rally in US equities.The strategist said that markets have forgotten about “the whole idea of accruals” — earnings without cash coming through the door. The spread between companies’ cash flow and income reported during this period of hot inflation will hurt margins, Wilson said.“The question is will the markets look through that and suggest that ‘this is temporary and companies will get their head around it’ which we agree with,” Wilson said. “But our experience is that the market will not look through it if the earnings degradation is as severe as I think it’s going to be.”The problem, he said, is that markets’ abilities to see through the difference between the real economy and what could happen with earnings “takes longer than it should.”“That is what is frustrating for some investors who are in the weeds on this,” he added. “It is obvious what is about to happen. Why is the market taking so long to price this? That is just the way it is.”His colleague at Morgan Stanley, Wealth Management Chief Investment Officer Lisa Shalett, later said on Bloomberg TV that the disconnect between the bond and equities markets has become “more severe.” But investors are seeing conflicting data, she said, noting that the Atlanta Fed is predicting that gross domestic product will grow in the first quarter, while the St. Louis Fed says it will be a recessionary quarter.“I had a mentor at the beginning of my career, Michael Goldstein, who used to say ‘nobody knows nothing,’ and that’s where we are at the minute,” she said.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9949087136,"gmtCreate":1678241119225,"gmtModify":1678241237091,"author":{"id":"4099091084693970","authorId":"4099091084693970","name":"LSH007","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"4099091084693970","authorIdStr":"4099091084693970"},"htmlText":"I missed the October 2022 bottom, so I'm hoping that Wilson is correct and I can buy when the 20% correction happens","listText":"I missed the October 2022 bottom, so I'm hoping that Wilson is correct and I can buy when the 20% correction happens","text":"I missed the October 2022 bottom, so I'm hoping that Wilson is correct and I can buy when the 20% correction happens","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949087136","repostId":1134330335,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949089587,"gmtCreate":1678238224950,"gmtModify":1678238229824,"author":{"id":"3559859558754319","authorId":"3559859558754319","name":"Bodoh","avatar":"https://static.tigerbbs.com/349218ea2852130ca86ce660b4aa2d59","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3559859558754319","authorIdStr":"3559859558754319"},"htmlText":"Ooops","listText":"Ooops","text":"Ooops","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949089587","repostId":1134330335,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":62,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1134330335"}