CoinVoice has learned that, according to Jin Shi reports, Morgan Stanley's Chief Investment Officer and Chief U.S. Equity Strategist Mike Wilson has expressed his latest views. He pointed out that the breadth of the U.S. stock market in December hit a historic low, coinciding with the 10-year U.S. Treasury yield breaking the 4.5% threshold, indicating that the Federal Reserve may not be able to provide the easing policies expected by the market.
Wilson analyzed that the current disconnection between market breadth and prices is similar to that in 1999, primarily due to ample liquidity. As the scale of reverse repurchase agreements (RRP) shrinks from a peak of $2.5 trillion, along with the Federal Reserve possibly implementing a slight interest rate cut, liquidity tightening may be faced in early 2024. He advised investors to continue focusing on high-quality stocks, as unprofitable growth stocks and low-quality cyclical stocks may face significant impacts.
Wilson stated that due to the lack of mean reversion in recent years, investors tend to track price trends, leading to extreme concentration in the market, and the 'quality' factor has become a widely used stock selection criterion. [Original link]