- Morgan Stanley Wealth Management’s Lisa Shalett stated that stocks are on a “rollercoaster into nowhere.”
- Shalett explained that investors are too impatient and have zero tolerance for pain.
- She warned that this is preventing stocks from reaching their bottom, causing estimates for 2023-2024 to be lower.
According to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, the stock market is “on a rollercoaster to nowhere”.
Shalett pointed out recent market volatility, when After September’s inflation report, stocks plunged in the beginningIt came in higher than expected, and then rocketed this week Positive earnings reportsThis fueled a rally of three days ahead of third-quarter results and the Federal Reserve policy decision in November.
Positive Earnings from tech giants such as Netflix have continued to give stocks a boost – but that’s more reflective of the “extraordinary” impatience of investors, Shalett said, which is preventing the market from fully capitulating.
“I believe we’re going on this rollercoaster ride to nowhere, where occasionally we’ll get these bear markets rallies. She said that investors seem to be very impatient and that this market is extremely impatient. This causes a two- or three-day rally. BloombergWednesday
This is partly because the market has not felt the full effect of the Fed’s monetary tightening in this year. Just recently, the central bank issued its The third 75-point rate riseShalett said that the year was filled with a rush to lower prices. However, the economy has not shown any signs of slowing down, Shalett stated, and this led her to discount recent rallies.
Some Wall Street bulls have resisted this idea, believing that a bottom has already been reached and that new highs are possible. Fundstrat’s Tom Lee has previously predicted that the S&P 500 was set to rally 37%Fund flows and the end of the year show that the majority of investors are still around Think the bottom of the market may already be reachedAccording to Bank of America, it is a staggering 9%.
Shalett said that “it’s still not a clearing event which sets up for durable buyable bottoms in this market.”
“We still have to rebase numbers. It doesn’t seem like Q3 will be that capitulative moment. This pushes the 2023 and 2024 numbers to where they will eventually go.
