News Formal

Morgan Stanley says glum profit view to dent economy-tied stocks

  • 📰 BNNBloomberg
  • ⏱ Reading Time:
  • 35 sec. here
  • 12 min. at publisher
  • 📊 Quality Score:
  • News: 52%
  • Publisher: 50%

Business News

Company News,Financials,Industry

A dimmer outlook for U.S. corporate earnings is likely to hurt stocks that are tied to the economy, as investors worry about the impact of falling inflation on pricing power, according to Morgan Stanley’s Michael Wilson.

Manhattan --

“In our view, this does not offer support for a broad cyclical rotation,” Wilson said, adding that the market was “also potentially focused on the notion that falling inflation may prove to be a headwind for cyclicals, which are highly dependent on pricing power.” A Citigroup Inc. basket shows earnings downgrades have broadly outnumbered upgrades since late June. Meanwhile, cyclical stocks in the S&P 500 have underperformed the relatively safer defensive sectors since April.

“For now, we continue to think the better risk/reward within small caps is growth equities, which should benefit from a cost of capital standpoint as the Fed cuts” rates, Wilson said.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 83. in CA

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Morgan Stanley’s Wilson Says a 10% Stock Market Correction Is ‘Highly Likely’Traders should brace for a correction in the stock market as uncertainty swirls around the US presidential campaign, corporate earnings and Federal Reserve policy, according to Morgan Stanley’s Mike Wilson.
Source: BNNBloomberg - 🏆 83. / 50 Read more »

Morgan Stanley’s Wilson Says a 10% Stock Market Correction Is ‘Highly Likely’(Bloomberg) -- Traders should brace for a significant pullback in the stock market as uncertainty swirls around the US presidential campaign, corporate...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »