Morgan Stanley chief strategist for US equities, Mike Wilson, tells CNBC that we are nearing the end of the bear market.
“I think we are in the final stage, but the final stage can be very challenging. Now there is a more two-way risk. And I think we’ll be in that two-way risk through the end of the year,” he says. He believes the bear market will end by the first quarter of next year, as more is known about corporate earnings by then.
Believe in a new fund
Wilson says you’ll most likely see a low during the first quarter of next year. He believes the S&P 500 falling towards 3,000 points will be a natural bottom for this bear market. He believes the S&P will bottom out between 3,000 and 3,300 points during the first three months of next year. The index reached 4,027.26 on Wednesday and is therefore down 16% year on year.
“The new fund will be a fantastic buying opportunity because when we get to the end of next year, we’re looking to 2024, when earnings actually accelerate again,” Wilson says.
He also added that earnings expectations for next year are about 20% too high.
