Why the stock market rally can keep going, says Wall Street strategist who only recently warned of a death zone.

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Why the stock rally can keep going, says Wall Street strategist who only recently warned of a death zone.

On the heels of last week’s losing-streak breaking rally, investors look headed for the sidelines on Monday.

However, recent momentum for market does appear to have nudged one of Wall Street’s most bearish strategists to ease up a little on the gloom. Our call of the day returns to Mike Wilson, the Morgan Stanley strategist who two weeks ago warned that investors had pushed stocks into a death zone. Wilson, who expects the S&P 500 will finish the year at 3,900 — the more bearish end of Wall Street’s wide-ranging forecasts — warned in late February that investors had been following stock prices to “dizzying heights once again,” driven by liquidity and greed. He said pricey valuations meant investors weren’t being compensated for risk.

The markets Stock futures ES00 YM00 NQ00 are struggling for traction, while the 10-year Treasury yield TMUBMUSD10Y is lower, at 3.919% after briefly topping 4% last week. Oil prices CL.1 are falling after China set a conservative growth target of “around 5%.” The dollar DXY is slightly higher.

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