Morgan Stanley’s Michael Wilson in a research note, info comes via Bloomberg (gated).
- “With the back-stopping of bank deposits by the Fed/FDIC, many equity investors are asking if this is another form of QE and therefore ‘risk on’”
- “We argue it’s not, and instead represents the beginning of the end of the bear market as falling credit availability squeezes growth out of the economy.”
- S&P 500 will remain unattractive until equity risk premium climbs to as high as 400 basis points from the current 230 level
- “The last part of the bear can be vicious and highly correlated,” he said. “Prices fall sharply via an equity risk premium spike that is very hard to prevent or defend in one’s portfolio.”
SPX:
