Morgan Stanley strategist: US stocks are likely to pull back 10%

Odaily News Morgan Stanley strategist Mike Wilson said traders should prepare for a correction in U.S. stocks as uncertainty grows around the U.S. presidential election, corporate earnings and Federal Reserve policy. I think theres a good chance of a 10% correction at some point between now and the U.S. election, Wilson said in an interview on Monday. The third quarter is going to be volatile, and companies are losing pricing power and need rate cuts. Goldman Sachs Scott Rubner said on Monday that he expects stocks to experience two painful weeks starting in August if corporate earnings miss expectations. Andrew Tyler of JPMorgan Chases trading desk said he remains bullish, but recent weak economic data has made him a little less confident. Citigroups Scott Chronert warned of a potential correction. Morgan Stanleys Wilson said, The probability of stock prices going up between now and the end of the year is very low, much lower than normal. However, Wilson is not particularly worried about a correction. Instead, he said it could create opportunities for investors because valuations are currently lackluster after the SP 500s double-digit gains this year. He said the best way to invest in the stock market right now is through individual stocks, not indexes. (Global Times)