About Michael Wilson
Mike Wilson, Morgan Stanley's chief U.S. equity strategist and chief investment officer, has maintained a bullish outlook on the stock market through mid-2026, describing the current period as an earnings-driven bull market. He stated that the market has "moved past" the U.S.-Iran war, comparing it to how investors previously moved past tariffs, and argued that a stable resolution in the Middle East could lead the bond market to walk back priced-in Federal Reserve rate hikes. Wilson characterized recent market volatility as a "summer chop" and a rotation, not the end of the bull market, and said he expects stocks to rise into year-end. He noted that the next phase of the bull market typically involves flat-to-down multiples with earnings driving gains, and that a rotation into areas such as consumer, transportation, and regional bank stocks is underway.
Wilson also addressed risks to the market, including the transition at the Federal Reserve. He said that new Fed chair Kevin Warsh has described himself as a "balance sheet hawk," and that if he follows through on reducing the balance sheet, that could pose a "bigger risk" for markets. Wilson added that the liquidity picture is "deteriorating" and that the Fed's meeting would be important for managing liquidity. On oil prices, he stated that $126 per barrel is "not manageable" and that if prices stay at that level for three to four months, it would likely cause a 10% hit to U.S. earnings growth and push the stock market lower. Regarding artificial intelligence, Wilson described it as a capex cycle and predicted a 30 to 50% drawdown in related stocks at some point, though he said the long-term cycle remains intact.
Source: AI-verified profile updated from Michael Wilson's recent appearances.
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✨ AI-enhanced transcript with speaker attribution
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Interviewer0:00
Good morning, welcome. I saw the various notes of late. You were calling for a correction, which obviously we had a bit of a pullback, but was that it? I mean, it was brief, it lasted a week or so, four percent peak to trough fall, and we're back at records again.
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Michael Wilson0:16
Yeah, I mean it was brief, so if you blinked you missed it. That looks like that was it for now. And I mean the markets are quite powerful at the moment, and they have been right. I mean, there's tremendous liquidity, there's a very good and very understandable story behind the scenes, meaning we've got a strong economic recovery that's visible to everyone. The earnings season's been good so far, we've heard about that this morning, and people have bought into it. I guess what I would say is that right now the markets are, I think, still in a bit of a fragile state, more fragile than people might think, because people are involved. There is still leverage in the system, it's not dangerous necessarily, and so we should expect three to five percent corrections at any moment, that's normal. But yeah, the correction over the last couple weeks is over, we made new highs, and the bull market is intact.
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Interviewer1:06
So who is the marginal kind of market mover at the moment? And is it the retail investor in a way that, let's say two years ago, we never would have expected? And what's the risk that they change their mindset and outward?
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Michael Wilson1:18
Yeah, I think that's the right question, Wilf. I mean, right now we are seeing definitely inflows from the retail community, meaning we're seeing equity inflows for the first time in really a decade in a more consistent manner. So I would argue, and you just said it, that the retail community, the retail investor, is the marginal mover of stocks at the moment. They are coming in, and that's not a bad thing. However, I would point out that consumer confidence has not really kept pace with that. So they could change their mind. Right now they seem to be in the bullish mindset and they're putting money in, so you're absolutely correct, retail is the marginal buyer, and that's probably going to persist. If that changes, then we probably would have a bigger correction.
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Interviewer2:03
And so the other factor, maybe this applies more to the institutional buyer, not the retail buyer that we've talked about for a long time, has been yields rising and whether that pressures multiples. Where do you stand on the levels that start to worry you on that, given that today we touched two percent again on the thirty year?
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Michael Wilson2:20
Yeah, I don't think it's a problem if it happens gradually. So I mean, we know rates have been moving up over the last four or five months pretty steadily. As you point out, thirty year now is about two percent for the first time in quite a while, ten year has been kind of creeping higher. If that happens gradually, earnings should be able to offset that, meaning we can still move higher, and more importantly individual stocks can move higher because they'll surprise on the upside further. The problem for the market will come if rates were to move up in a non-linear fashion for some reason, all of a sudden bond market says, 'Oh my goodness, there's too much stimulus now, inflation is going to be a problem,' and let's say the ten year were to shoot up 50 basis points really quickly. In that case, you could have a 10% correction quite rapidly. But that's not happening. We've been a little surprised by that, quite frankly, that the bond market's been kind of dragging its feet in that regard. But right now it's a gradual move higher, and if that's the case, then these pullbacks are going to be brief and shallow.
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Narrator3:19
Shepard Smith here. Thanks for watching CNBC on YouTube.
