Michael Wilson on market outlook
From Markets are telling us that 2021 will be pretty good for the economy: Morgan Stanley CIO · · CNBC Television
“The market is telling us that 2021 is going to be a pretty good year for the economy and for earnings.”
On , Michael Wilson, Chief U.S. Equity Strategist & Chief Investment Officer at Morgan Stanley, spoke about market outlook during Markets are telling us that 2021 will be pretty good for the economy: Morgan Stanley CIO on CNBC Television.
About Michael Wilson
Michael Wilson, chief U.S. equity strategist and chief investment officer at Morgan Stanley, said in late April that the equity market has moved past the Iran conflict and is now focused on earnings. He stated that the market has already priced in many risks, noting that the S&P 500 is near highs despite oil prices reaching $126 per barrel. Wilson said that sustained oil prices at that level would likely cause at least a 10% hit to U.S. earnings growth, but added that the market appears to assume the situation will resolve over the summer. He also said the S&P 500’s low near 6,300–6,500 held and that it is unlikely the market will revisit those lows. Wilson described the transition at the Federal Reserve as a potential source of uncertainty, noting that incoming chair Kevin Warsh has signaled he is a balance sheet hawk. He said that if Warsh follows through on reducing the balance sheet, that could pose a bigger risk for markets, though he does not expect action this year. Wilson also said that immigration restriction is benefiting lower-income workers by reducing competition for labor, and that the broader market is seeing earnings broaden beyond the “Mag Seven” into small caps, consumer discretionary, financials, and industrials. He identified the bond market and the Fed’s control of the long end of the yield curve as the biggest risk for equities.