A top executive at Morgan Stanley says the US stock market currently looks underwhelming, with limited upside for the rest of the year.
In a new interview with CNBC, Andrew Slimmon, senior portfolio manager for Morgan Stanley’s Investment Management division, says he’s not expecting the S&P 500 to be “substantially above” the 6,000 mark any time soon.
Says Slimmon,
“My base case for the year has been [that] it’s a pause year. We’ve had two great years in a row and the market needs kind of a timeout, or a breather. If I work backwards from the end of the year, it’s tough to see the markets substantially above 6,000 and 5,900 that’s not a lot of upside, and I’ve learned that the market doesn’t just creep along slowly, it deviates around that central norm so somewhere along the way another drawdown and suspect it’ll be later in the summer.
I will tell you this. I’m always very intrigued when the actual data diverges significantly from what is projected by the supposed experts to come. And the actual data, earnings came in strong in the first quarter, they beat by $3.50 versus consensus, but the whole-year number is down $10 because ‘the bad is yet to come.’ And this does kind of remind me of Covid which analysts ended up being way too negative on earnings for 2020-2021. I suspect that will be the same case, so I do think we’ll get a rally into the end of the year as analysts are forced to raise their numbers, but in the meantime, I wouldn’t be surprised if not much happens to the market between now and the fourth quarter.”
At time of writing, the S&P 500 is trading at 5,975, about a 2.8% move away from all-time highs.
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