ICYMI - A note from Morgan Stanley equity analyst Wilson:
- "the equity market continues to expect the best of both worlds—rate cuts and durable growth. We view the likelihood of both of those outcomes playing out in concert this year as low... equities are priced for an optimistic and lower probability outcome"
- “Many of the leading macro data points that we focus on have fallen in recent weeks and are not pointing to a similar run rate in terms of strength looking forward over the next several months,”
- “We’re more skeptical as labor costs continue to be a headwind for corporates and our leading margin gauge points to additional margin downside and a muted recovery thereafter over the coming months.”
- slowing inflation means pricing power will fade for firms
- if economic data improve, the broadly expected earnings recovery could materialize, reducing the probablility of his below-consensus $195 base case for earnings per share in 2023.
Info via a (gated) Bloomberg report.
