Morgan Stanley's Mike Wilson is warming to the U.S. stock-market rally. Here's what would make him turn bullish.

Morgan Stanley’s top U.S. equity strategist Michael Wilson, one of Wall Street’s most prominent bears, is warming to the idea that the 2023 stock-market rally might have legs.

In a note shared with clients earlier this week, Wilson, who was one of only a handful of Wall Street strategists to anticipate 2022’s inflation-shock driven selloff, sketched out a scenario that could see U.S. stocks continue to climb. See: Morgan Stanley’s Mike Wilson admits ‘we were wrong’ about 2023 stock-market rally, but refuses to throw in the towel

Growth stocks like the Magnificent Seven megacap technology names are leading the way in 2023, just like they did in 2019. In fact, the composition of the 2023 appears eerily similar to 2019, Wilson and his team noted, offering up a chart showing how technology-led growth — then as now — was in the front of the pack while defensive sectors like consumer staples trailed.

Treasury bills with lifespans of just a few months are still offering some of the most attractive yields in two decades, with the six-month bill yield at 5.485% on Wednesday, according to FactSet data.

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