Morgan Stanley with 3 reasons why the S&P500 bear market is not over

Via Morgan Stanley’s Wealth Management unit, their outlook for US equities.

Analysts say recent equity gains are not the start of a long-term bull market; rather, it is just another bear market bounce. The current surge appears to be supported by easing financial conditions rather than strengthening economic fundamentals. Project MS these will be filming later this year.

MS describe the incongruities:

1. Even as stocks trade higher, recent market action for other asset classes paints a dramatically different picture. US government bonds: Treasury yield curves remain deeply inverted, a proven signal that an economic downturn is on the horizon.

2. Since the October low of the S&P 500, gold has continued to outperform both the S&P 500 and the Nasdaq.

3. While equity investors expect a “soft landing” and a potential rebound in economic growth later in 2023, oil prices do not reflect this.