The US economy is in “a new bull market,” according to Mike Wilson, Morgan Stanley’s chief US equity strategist.
Wilson says in a new interview with Bloomberg TV that Morgan Stanley believes the economy had been in a three-year rolling recession that ended in April.
[adinserter block="1"]“Now we’re in a new bull market and capital markets activity is just another sign that that analysis or that conclusion is probably correct.”
The Morgan Stanley executive believes there could be volatility and drawdowns in the third quarter, but he also thinks that such corrections wouldn’t invalidate the bull market thesis.
“We’ve said that the third quarter, we think this is the best chance we could have for some correction or moderation, if you will. But I want to be very clear, it is still early in the new bull market, so you want to be buying these dips.”
Wilson also outlines what he believes needs to happen for the bull market to continue.
“I think to continue the bull market, you need two things. The ingredients you need [include] positive rate of change on growth. Okay, we have that from an earnings standpoint. And you have a policy that isn’t inhibiting that growth. So both fiscal and monetary policy look like they’re okay. And it appears as if the Fed, maybe they’re not going to cut [rates] in the short term, but all signs point to the next move will be a cut. So you have supportive policy, you have positive rate of change, you have good flow dynamics. I mean, those are all the ingredients you need.”
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