Why the Stock-Market Rally May Be Nothing More Than 'Wishful Thinking,' According to Morgan Stanley CIO

MarketWatch2022-04-14

Don't go chasing rainbows in stocks, warns Lisa ShalettThe market’s resilience, Shalett argued, may reflect an overconfidence in the Federal Reserve’s ability to engineer a “soft landing” for the ...

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Comments

R n W
2022-04-14
R n W
Thank you
jethro
2022-04-14
jethro
Thanks for the share 😊
Universe宇宙
2022-04-14
Universe宇宙
Listen to the bond market.That is the advice from Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, warning that recent resilience in stocks could be "nothing more than a bear-market rally, fueled by wishful thinking and excess liquidity," in a Wednesday client note.
szueyann
2022-04-14
szueyann
Like
May168
2022-04-14
May168
Rainbow and the non existent pot of gold and the big boys who are real leprechauns...
Worpeng2002
2022-04-14
Worpeng2002
Nice

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As of Wednesday's close, the benchmark was 7.3% away from its last record high on Jan. 3, according to Dow Jones Market Data.The Nasdaq Composite Index, though battered by expectations of aggressively higher interest rates, finished Wednesday roughly 15% below its closing record on Nov. 19, 2021.The resilience, Shalett argued, may reflect an overconfidence in the Federal Reserve's ability to engineer a \"soft landing\" for the economy, as it seeks to dramatically tighten financial conditions, including its plans to swiftly shrink its balance sheet.\"Such aggressive tightening will make the Fed's policy execution highly complex, and historical examples suggest that even when the central bank does manage to land the economy softly, markets often feel a much harder impact,\" she wrote.Perhaps stock-market investors could be also dismissing the longer-term prospect of rising \"real\" interest rates, and other potential headwinds from Russia's war in Ukraine, including the threat of a U.S. economic slowdown or recession in Europe.Instead, Shalett thinks \"more cautious signals coming from the bond market may better reflect the likely path ahead.\"After quickly climbing to the highest since early 2019, the 10-year Treasury yield eased back slightly to 2.688% on Wednesday.\"We look for risks to get more rationally priced and believe investors should watch earnings-revision trends for confirmation that index-level and mega-cap tech profits aren't immune to the forces of reality,\" Shalett said.","kind":"highlight","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":9080558021,"gmtCreate":1649899946549,"gmtModify":1676534602331,"author":{"id":"3579241158508767","authorId":"3579241158508767","name":"R n 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the share 😊","text":"Thanks for the share 😊","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9080522579","repostId":2227643789,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9080584793,"gmtCreate":1649898637026,"gmtModify":1676534601628,"author":{"id":"3585001294737518","authorId":"3585001294737518","name":"Universe宇宙","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":6,"crmLevelSwitch":0,"idStr":"3585001294737518","authorIdStr":"3585001294737518"},"htmlText":"Listen to the bond market.That is the advice from Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, warning that recent resilience in stocks could be \"nothing more than a bear-market rally, fueled by wishful thinking and excess liquidity,\" 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and the non existent pot of gold and the big boys who are real leprechauns...","listText":"Rainbow and the non existent pot of gold and the big boys who are real leprechauns...","text":"Rainbow and the non existent pot of gold and the big boys who are real leprechauns...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9080531631","repostId":2227643789,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9080503971,"gmtCreate":1649895950713,"gmtModify":1676534600459,"author":{"id":"3582000520700468","authorId":"3582000520700468","name":"Worpeng2002","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3582000520700468","authorIdStr":"3582000520700468"},"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9080503971","repostId":2227643789,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":162,"commentSize":8,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 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