Investors are hooked on the"heroin" of potential Federal Reserve interest-rate cuts but could receive a rude awakening after the central bank's Wednesday statement, according to Morgan Stanley's chief US equity strategist.
Mike Wilson said he's expecting the market to soon shift its focus to weakening corporate earnings rather than the Fed slashing rates – and he thinks stocks will lose their shine as a result. "Once this event gets past us, and the market realizes the Fed's not cutting rates — there's no 'heroin', so to speak —we're going to price to fundamentals, which are clearly deteriorating, in our view," he toldThe Fed's Federal Open Market Committee concludes its two-day meeting later Wednesday, when Chair Jerome Powell is set to share policymakers' latest interest-rate decision.
"They've done the hard work, they've got rates to 4.5% — like, why quit now? Particularly with the froth coming back now – financial conditions are actually where they were a year ago, when they started raising rates," he told CNBC.Stocks broke out of 2022's downturn by rallying in January. The benchmark
If people would have listened to him, they would have missed 20% upsides in the market lately. He does not care about retail investors, he works for big bank for God’s sake.
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