According to Odaily, Morgan Stanley strategist Mike Wilson has warned traders to prepare for a potential setback in the US stock market. This comes amidst increasing uncertainties surrounding the US presidential election, corporate earnings reports, and Federal Reserve policies. 'I think there's a high probability of a 10% pullback from now until some point during the US election,' Wilson stated in an interview on Monday. He also predicted that the third quarter would be rather turbulent, with companies losing their pricing power and needing to cut interest rates.
Goldman Sachs' Scott Rubner echoed Wilson's sentiments on Monday, stating that if corporate performance falls short of expectations, he anticipates the stock market will endure a painful two-week period starting from August. Andrew Tyler from JPMorgan's trading department expressed a bullish outlook, but recent weak economic data has slightly dampened his confidence. Citigroup's Scott Chronert also issued a warning about a potential pullback.
Despite the looming setback, Wilson is not overly concerned. Instead, he believes this could create opportunities for investors. After the S&P 500 Index achieved double-digit gains this year, he described the current valuation as 'lackluster.' He suggested that the best way to invest in the stock market at present is through individual stocks, rather than indices.