'Double down' on defense because stocks will plunge another 10%, Morgan Stanley's Mike Wilson warns

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Stocks will plunge another 10% due to the growth slowdown, Morgan Stanley's Mike Wilson warns (via CNBCFastMoney)

, expects the painful drop will happen within the next three to four weeks. He anticipates challenging earnings reports and guidance will give investors a wake-up call regarding slowing growth.His strategy: Double down on defensive trades ahead of the predicted setback. He warns virtually every S&P 500 group will see more trouble due to frothiness and is making decisions on a stock by stock basis.

"We're not making a big bet on cyclicals here like we were a year ago because growth is decelerating. People got a little too excited on these cyclical parts of the market, and we think that's wrong-footed," he said. "There's going to be a payback in demand this year. We do think margins are a potential issue."

Wilson doubts the Federal Reserve's two-day policy meeting which kicks of Tuesday will provide meaningful comfort to investors. "They're not going to back off because the market sold off a bit here," Wilson said. "The data really hasn't been soft enough for themOn Monday, the S&P 500 closed at 4410.13, 8.5% below the index's all-time high hit on Jan. 4. Wilson's year-end price-target is 4,400.

 

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FastMoney And bc of breakdown of FED's printer mc

FastMoney Well I’m not seeing any growth slowdown…so I’m calling BS.

FastMoney More pain ahead

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