Morgan Stanley’s Mike Wilson has long been cautious about US stocks, but he’s no permabear.
In fact, Wilson was called “the biggest bull on the Street” shortly after becoming Morgan Stanley’s chief US equity strategist in spring 2017, and his bullish S&P 500 price target at the time soon proved to be accurate.
Wilson now sees another 20% selloff ahead as four-decade-high inflation and the Federal Reserve’s aggressive response cause the economy to weaken.
“With our view for lower multiples and earnings now more consensus, the markets are more fairly priced,” Wilson wrote in a June 21 note to clients. “However, it does not price the risk of a recession, in our view, which is 15% to 20% lower.”
In that same note, Wilson listed 19 stocks that Morgan Stanley analysts think will hold up well amid the weakness.
Ticker: EDR
Market cap: $9.4B
Sector: Communication Services
P/E ratio: 599.2x
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Ticker: FWONK
