Stocks are in a 'pivot rally' that can still go higher: Morgan Stanley

Stocks are partying like its 2019 thanks to the Fed, and they could still run higher, according to one of Wall Street's most prominent bears.

"The data we have today suggests to us that we are in a policy-driven, late-cycle rally," Wilson wrote. Currently, stocks are climbing against a still-supportive global liquidity backdrop, the strategist said, and investors are optimistic that falling inflation will justify loosening monetary policy. On Friday, the Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, saw its slowest increase in two years.

"The 2019 analogy, in and of itself, suggests more index level upside from here," Wilson said."Though we'd note that the Fed was already cutting rates for a good portion of 2019, and the market multiple is already close to 1 turn higher than where it peaked during that period.". He pointed to a resilient economy and promising earnings as fuel for the rally. on Friday.

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