Morgan Stanley is bullish on U.S. stocks against the trend: A weaker dollar will boost corporate profits
Morgan Stanley's Chief U.S. Equity Strategist Michael Wilson believes that a weak dollar will support U.S. corporate earnings, helping U.S. stocks outperform global markets. He expects the S&P 500 index to be in the range of 5000-5500 points, but a larger increase will require reaching a tariff agreement, a rebound in earnings expectations, and a loosening of policies by the Federal Reserve. In contrast, strategists from JP Morgan and Société Générale hold a cautious view on U.S. stocks, believing that the risk-reward profile of international stocks is more attractive
According to the Zhitong Finance APP, Michael Wilson, Chief U.S. Equity Strategist at Morgan Stanley, stated that a weak dollar will support U.S. corporate earnings and help the U.S. stock market outperform other global markets.
As many strategists on Wall Street declare that the era of "American exceptionalism" is coming to an end, Michael Wilson stands out with his relatively optimistic view on the U.S. stock market. He pointed out that the lower volatility of earnings growth and the fact that U.S. companies are seen as higher quality are reasons for his positive outlook on the U.S. stock market. In a report on Monday, he wrote: "We are still in the late cycle, and the relative strength of quality stocks and large-cap stocks should continue."
Michael Wilson expects the S&P 500 index to remain in the range of 5000-5500 points. He added that for the U.S. stock market to achieve a more significant rise, a tariff agreement between the U.S. and China, a noticeable rebound in earnings expectations, and the possibility of the Federal Reserve easing monetary policy are needed.
In contrast to Michael Wilson, Mislav Matejka, a strategist at JP Morgan, is among those who lean towards favoring international stocks over U.S. stocks. In a recent report, Mislav Mate stated that the risk-reward profile of non-U.S. stocks is more attractive, especially given President Trump's ongoing fluctuations in tariff policy and the still high risk of economic recession.
Mislav Matejka is not the only one cautious about U.S. stocks. Alain Bokobza, Head of Asset Allocation at Société Générale, warned that if Trump continues to pursue his trade policies, investors will continue to reduce their exposure to U.S. stocks and the dollar. A team of strategists at Bank of America, led by Michael Hartnett, stated last week that investors should sell on rallies in U.S. stocks and the dollar, warning that the current conditions do not support a sustained rise
