Morgan Stanley Announces Annual Growth List Despite Bear Market Speculations

Investments January 2, 2018

It was around August when United States President Donald Trump posted a celebratory tweet with the stock market having the longest bull run in the history of the country with 3,453 days at that time. The last time that the bull way was held for quite some time was in March 2009, which surpassed the record in 1990 and 2000.

This record-breaking moment was indeed a great news, but everything must come to an end. Morgan Stanley brings out their annual growth list and reveals that investors must open their eyes since the bear market is upon the market.

Goodbye Bull, Hello Bear

The stock market rejoiced when analysts have finally said that we are in the bull market after so many years, but it would seem that it didn’t last that long and Morgan Stanley reveals that bull maker is officially over, but some investors haven’t realized it just yet.

According to Michael Wilson, who is the equity strategist of Morgan Stanley, the bear market has begun and this is despite how the American economy is going strong. The one to blame is said to be the market getting so much form the economic growth.

Wilson said that this year is definitely not a year of recession which is indeed a great thing, but this simply means that the worse is yet to come. Wilson has been skeptical about the bull market for months now and can see how things may be in the market now that we’re on the bear run.

One proof has got to be some massive downfalls from some of the biggest companies such as Apple losing so much with both sales and stocks, other tech companies like Amazon, Facebook, and Netflix tumbling as well, while The Dow dropped about 400 points not too long ago.

It also shows that the bull market may be under siege with the 40 percent of the S&P 500 stocks going all the way down losing at least 20 percent. The worst thing coming is said to be the rising interest rates that the Federal Reserve is pursuing since this is something that the economy may not be able to handle.

One of the proofs for that would be the slow rates coming into the auto and housing loans. Investors have started to dump individual stocks and this is despite how some companies revealed that their stock results were totally unexpected. Despite all this, Morgan Stanley still managed to release their annual growth list.

According to the bank’s research department, there are 25 stocks this year that are most likely to grow through global economic conditions. Some of them are Alphabet, which is the parent company of Google, together with Amazon, Netflix, MasterCard, Visa, and Ulta Beauty and more.

Overpriced Stocks

Wilson somehow explained how the bear market has officially started, hence in one of his most recent interviews, the equity strategist said that investors must actually be careful when it comes to picking which stocks to buy in 2019. That is because some of them may be overpriced due to the overhyped growth names in the market.

He predicts that there will be an earnings recession sometime next year together with two-quarters of negative over-year growth. Wilson said that the quarters that are most likely to be at risk next year would be the second and the third quarter, and one of the reasons may be because of the margin pressure.

The equity strategist for Morgan Stanley also believe that there will be a chaos on the individual securities in 2019, hence the lookout on the possible overpriced stocks. As the year ends, Wall Street is said to be concerned about the trade wars between the United States and China affecting the stocks once more.

However, they are also worried about the possible effects of the rise of the interest rates done by Chairman Jerome Powell of the Federal Reserve. They are expected to do another raise before the year ends which would be their fourth time this year. They projected about three increases in 2019 when they did a raise last September. Despite all this, massive changes may be seen as 2019 gets nearer and it can either put investors to heaven or hell.