One of Wall Street's biggest bears admits 'we were wrong' about 2023 stock-market rally, but refuses to throw in the towel

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A lot can change in a year --- just ask Morgan Stanley's Mike Wilson.

As recently as last fall, Wilson, Morgan Stanley’s top U.S. equity strategist, was riding a wave of vindication after successfully anticipating last year’s inflation-induced market carnage, which sent both U.S. stocks and bonds sliding lower. He was one of only a handful of Wall Street analysts to pull this off.As recently as last fall, Wilson, Morgan Stanley’s top U.S.

“Last October, we based our tactically bullish call on the view that inflation was peaking along with back-end rates and the US dollar. However, the upside move in equity multiples on the back of this theme has gone further and persisted longer than we anticipated—i.e., we were wrong,” Wilson said in a note to clients dated Monday.

Does this apology mean Wilson is capitulating and throwing in with the bulls now? Quite the opposite. His justification: slowing inflation could hurt U.S. companies’ ability to raise prices, which could impact earnings down the road.

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