Morgan Stanley predicts 5% Correction. But we're already down 3%!

Discussion in 'Trading' started by schizo, Jan 27, 2020.

  1. schizo

    schizo

    Morgan Stanley's chief U.S. equity strategist says we may be in the throes of a 5% pullback for the stock market


    Michael Wilson , Morgan Stanley's chief U.S. equity strategist, says the first major stock market pullback since October may be under way. The strategist, in a research report dated Jan. 27 , references "correction," which market technicians usually define as a decline from a recent peak of at least 10%. However, his prediction that the market is more likely to decline by half that much indicates that he's forecasting a retreat from stocks that have hovered near records rather than a traditional correction.

    Wall Street investors, perhaps, shouldn't need the strategist to determine the current state of the equities, however. On Monday (http://www.marketwatch.com/story/us...s-china-coronavirus-spreads-worries-escalate- 2020-01-27), the Dow Jones Industrial Average slid 453.93 points, or 1.6%, to 28,535.80, following an intraday nadir at 28,440.47, while those for the S&P 500 index slid 51.84 points, or 1.6%, to 3,243.63, with an intraday low at 3,234.50. The Nasdaq Composite Index shed 175.60 points, or 1.9%, to reach 9,139.31, after hitting a low at 9,088.04. The Dow and S&P 500, marked their worst daily skids since Oct. 2 , and the Nasdaq Composite logged its worst day since Aug, 23, according to Dow Jones Market Data.

    Stock markets have traded south in the past several sessions, with the Dow momentarily losing its grip on gains for 2020, as a rapidly spreading virus in China has sparked fears of a global outbreak that could curtail economic expansion in the world's second-largest economy.
    Chinese health officials said the coronavirus -- an illness akin to SARS, or severe acute respiratory syndrome -- has spread, infecting more than 2,800 people and claiming at least 80 lives around Wuhan city, China , where it reportedly originated.

    However, Wilson said that the market's slump is likely to be limited due to a Federal Reserve that has proven quick to provide liquidity to stalled-out markets as well as ultralow interest rates, which currently stand at a 1.50%-1.75% range. The Fed holds a two-day meeting beginning on Tuesday.


    Read:These stocks are most at risk from the coronavirus (http://www.marketwatch.com/story/these-stocks-are-most-at- risk-from-the-spreading-coronavirus-jefferies-says-2020-01-27)

    Wilson said he expected the S&P 500, including defensive names, to continue to outperform emerging market assets and small-caps. The analyst and his research team explain it this way: While near-term risks have increased, we think that corrections at the index level will be contained to 5 percent or less while the defensive skew outperforms both growth and cyclicals until rates show some signs of actually bottoming or hard data suggests the recovery will be more robust than we currently expect.


    Check out the attached chart:
    Check out: The stock market's biggest problem this week isn't the coronavirus or Mideast tensions, strategist warns (http://www.marketwatch.com/story/co...the-stock-markets-biggest-problems-this-week- strategist-warns-2020-01-26)
    It is important to note that a number of analysts have said that financial markets, which have been trading near all- time highs, remain vulnerable to headlines surrounding the outbreak (http://www.marketwatch.com/story/why-the- coronavirus-outbreak-gives-stock-market-investors-another-reason-to-be-cautious-2020-01-24). Cases have turned up in other countries, including five in the U.S. , as well as Japan , Taiwan , South Korea , Singapore and France .


    In July of 2018, Wilson accurately predicted that the market would see its largest correction in months, with the rally showing signs of "exhaustion." He wrote then: "The bottom line for us is that we think the selling has just begun and this correction will be biggest since the one we experienced in February."


    However, his more recent predictions have been less on the mark, which he has acknowledged (http:// www.marketwatch.com/story/i-did-not-expect-us-to-be-at-all-time-highs-by-april-says-morgan-stanleys-wilson-as-stock- market-pops-2019-04-23).
    - Mark DeCambre ; 415-439-6400; AskNewswires@dowjones.com

    (END) Dow Jones Newswires
    01-27-20 1847ET
    Copyright (c) 2020 Dow Jones & Company, Inc.
     
  2. Overnight

    Overnight

  3. volente_00

    volente_00

    I have 11.61%
    And then 20.75%
     
  4. Overnight

    Overnight

    Why not just go for the 50 banger like in 2008, or the 70 banger in 1987?
     
  5. volente_00

    volente_00


    Because we are only going to correct 20.71% and not 57% like 2008/09
     
  6. My god man... the number of times you get stopped out, why don't you just let the market do what it's going to do instead of predicting
     
    murray t turtle and Nobert like this.
  7. themickey

    themickey

    index(2).jpg
     
    murray t turtle and Nobert like this.
  8. padutrader

    padutrader

    why
     
    Nobert likes this.
  9. volente_00

    volente_00


    Slowing economy Via global recession
     
  10. schizo

    schizo

    :D:D:D

    [​IMG]
     
    #10     Jan 28, 2020