“Stocks could fall a further 7% after last week’s correction. But here’s why Morgan Stanley says that’s ‘healthy’”
June 15, 2020
“The three major benchmark indexes suffered their biggest weekly losses since March 20 last week, as the Federal Reserve’s downbeat economic outlook and rising coronavirus cases unsettled investors. Fears of a second wave grew over the weekend and U.S. stock futures pointed lower early on Monday.
However, in our call of the day, Morgan Stanley said last week’s correction was overdue and “healthy” and that the bull market would soon “resume in earnest.”
“We maintain our positive view for U.S. equity markets because it’s early in a new economic cycle and bull market. Last week’s correction was overdue and likely has another 5-7% downside. It’s healthy and we are buyers into weakness with a small/mid-cap and cyclical tilt,” the investment bank’s strategists said…”