Morgan Stanley’s Chief Investment Officer, Mike Wilson, reinforces his bearish stance on the stock market, citing apparent incipient speculation among investors.
What Happened: Wilson, in an interview with Bloomberg Surveillance Radio on Tuesday, noted a significant rise in speculative activities among investors.
With a year-end S&P 500 price target of 4,500, Wilson anticipates approximately a 13% potential downside from the present levels. His prediction is only surpassed in bearishness by JPMorgan’s Marko Kolanovic, who posits a 4,200 year-end price target.
Wilson identifies the trading boom in daily expiration options as an indicator of this escalated speculation. He equates the situation to prop betting in the stock market, indicative of high exuberance among investors.
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“I think a lot of folks, all they’ve done is raise their price targets based on higher multiples, and we’re not willing to do that because we don’t see the justification for higher multiples given that we basically ...