Morgan Stanley's Mike Wilson, he has an S&P 500 year-end target of 3,900 for next year .warned that corporate America is preparing for a downward earnings correction that could push stocks.
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He says nobody cares about what's going to happen in 12 months. They have to deal with it for the next 3 to 6 months," he told CNBC's "Fast Money" on Tuesday.
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This is where we actually think there is a significant downside. So, when really 3,900 it sounds like a boring six months. then ... it's going to be a wild ride.
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Wilson, who serves as the firm's chief U.S. equity strategist and chief investment officer, believes the S&P could fall 24% from Tuesday's close in early 2023.
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He said you should probably expect an S&P between 3,000 and 3,300 in the first four months of the year.
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when we think the acceleration of the correction on the income side will somehow reach its peak.
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He said The bear market is not over yet. if your earnings forecast is correct then We've got a significantly lower low.
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Wilson said Most of the damage will happen in these bigger companies — not just tech,
also Wilson said It could be consumer,It could be industrial.
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When those stocks had a tough time in October, the money moved to other areas. Part of that rally has been driven solely by money transfers.
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he said This is not a time to sell everything and run for the hills because that’s probably not until the earnings come down in January or February.