根据威尔逊的说法，① Morgan Stanley Chief Investment Officer Michael Wilson sets the target price for the s&p 500 index at 6,500 points by the end of 2025, an increase of 10.3% from the current level. ② Wilson believes that the Federal Reserve's interest rate cuts, improved economic growth, and the potential deregulation under the Trump administration suggest that investors should be bullish on the stock market.
On November 19, Financial Associated Press reported (Editor: Huang Junzhi) that one of Wall Street's famous bears, Morgan Stanley Chief Investment Officer Michael Wilson, has shifted to a bullish outlook on the usa stock market.
In a report released on Monday, Wilson set the target price for the s&p 500 index at 6,500 points by the end of 2025, indicating that the index could increase by 10.3% from the current level.
According to Wilson, the Federal Reserve's interest rate cuts, combined with improved economic growth and a wave of deregulation that may emerge under the incoming Trump administration, suggest that investors should lean towards being bullish on the stock market.
He added, "The potential rise in corporate animal spirits after the election (similar to what we saw after the 2016 election) could catalyze a more balanced profit situation for the entire market by 2025."
Considering that Wilson has been fundamentally bearish on the usa stock market for the past few years and correctly predicted the bear market in 2022, his shift this time is noteworthy. Previously, Wilson set the mid-2025 target for the s&p 500 index at 5,400 points, while the index closed around 5,893.62 points on Monday.
Moreover, he had warned in early July that due to uncertainties surrounding the usa election, corporate earnings, and Federal Reserve policies, traders should prepare for a significant correction in the usa stock market. Less than a month later, the s&p 500 index dropped 8.5% from its peak.
Wilson has previously been skeptical about the usa stock market rising due to increased valuations. Although he still acknowledges that valuations are high, he points out that it is not a big issue as long as the economy remains stable.
The report states that, on the surface, valuations have not reached extreme levels.
"The median pe of s&p 500 index stocks is 19.0 times, and if corporate profits recover as we expect, expanding by 2025, this index should continue to receive support," he added.
Wilson recommends that investors hold high-quality cyclical stocks, especially focusing on financial stocks. On the other hand, he advises investors to reduce shareholding in non-essential consumer and major consumer stocks, as they have limited pricing power and may face tariff risks.
Although Wilson has shifted to a more bullish tone for us stocks, he stated that in the context of changing market leadership and uncertainty around President Donald Trump's policies on immigration, global trade, and government spending, investors should "stay flexible."
"We may experience another upheaval in policy outcomes, which could have short- and long-term effects on the market," he wrote.
