Morgan Stanley on US Stocks - "we are far from out of the woods with this bear market"

Via a Morgan Stanley analyst Michael Wilson note on Monday.

Says the fastest Fed policy shift in 40 years drove the sudden failures of Silicon Valley Bank and Signature Bank in March and could bring about further surprises as the Federal Reserve Federal Reserve The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the Read this Term could keep rates higher for longer:

• “If there is one thing that can throw cold water on the large mega cap rally it’s higher yields due to a Fed that can’t stop hiking”

And:

• “More negative surprises lie ahead for investors”
• earnings Earnings A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price Read this Term estimates for Q1 have been cut by 15% since a peak last year
• worries over tighter credit conditions have sapped business sentiment this month - this is indicative of further earnings weakness ahead
• says market breadth (measured by the % of stocks in the S&P500 that have outperformed the broader index in the past three months) is at its lowest level on record, a sign investors may “suddenly” acknowledge that earnings forecasts “remain too optimistic”. “We think the recent collapse in breadth is the market’s way of warning us we are far from out of the woods with this bear market.”

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I posted another bearish viewpoint a little earlier:

• JP Morgan Kolanovic says even a mild recession could cause US stocks to fall by 15%