Morgan Stanley Cites 15% P/E Reset, Shares Among Only 11 S&P Gainers
Morgan Stanley shares were one of only 11 S&P 500 stocks to gain last week, leading the financial sector's outperformance. Morgan Stanley strategist Michael Wilson notes a 15% drop in forward P/E since October and almost 20% earnings growth but warns a Fed hawkish pivot could stall the bull-market correction.
1. Weekly Outperformance
In a broadly down market, Morgan Stanley shares were among just 11 S&P 500 names to post weekly gains, alongside peers like Goldman Sachs and JP Morgan, highlighting financials’ relative strength despite the S&P’s fourth straight decline.
2. Wilson's Market Assessment
Morgan Stanley strategist Michael Wilson argues the current pullback is a bull-market correction, citing a 15% reset in the S&P 500’s forward P/E since October and nearly 20% projected earnings growth, unusual strength even amid rising oil shocks.
3. Investor Implications
Wilson warns that only a fading Fed hawkish pivot—evidenced by a renewed negative correlation between bond yields and equities—will allow the correction to end in nominal terms, advising investors to monitor bond volatility and central bank signals closely.