Morgan Stanley called the end period of the «bear» market

Specialists of the Morgan Stanley Financial Corporation presented a forecast that runs counter to numerous warnings of leading economists about a recession. Mike Wilson, the company's chief investment officer, said that the stock market is in the last stage of a bear market.

At the same time, Wilson warned investors that it is necessary to wait a little before buying shares, since the last few months of the bear market will be turbulent and difficult.

Overall, the S&P 500 grew by more than 5% over the month, but the index has declined by more than 17% since the beginning of the year. And according to Wilson, corporate earnings estimates for 2023 are still overstated by 20%, given the persistence of inflation and the rapid rate increase this year.

At the same time, the analyst announced 3 key turning points in the American market over the next year. 

Firstly, this is an ongoing rally in the bear market, which will last 2 months and will lead to an increase in the S&P 500 by about 5%, to 4150 points. Income estimates should then decline as a result of a combination of the Fed's interest rate hike and a slowdown in economic growth.

The decline in earnings estimates will lead to a drop in the S&P 500 to 3000-3300 points in the first quarter of next year.

And after that, it is quite possible to expect a recovery from the minimum of the first quarter, along with the beginning of economic growth and the end of the «bear» market. It is these conditions that will be the ideal opportunity to buy.