Morgan Stanley Wilson bearish: "equities priced optimistic and lower probability outcome"

ICYMI - A note from Morgan Stanley equity analyst Wilson:

• "the equity market continues to expect the best of both worlds—rate cuts and durable growth. We view the likelihood of both of those outcomes playing out in concert this year as low... equities Equities Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p Read this Term are priced for an optimistic and lower probability outcome"
• “Many of the leading macro data points that we focus on have fallen in recent weeks and are not pointing to a similar run rate in terms of strength looking forward over the next several months,”
• “We’re more skeptical as labor costs continue to be a headwind for corporates and our leading margin gauge points to additional margin downside and a muted recovery thereafter over the coming months.”
• slowing inflation means pricing power will fade for firms
• if economic data improve, the broadly expected earnings recovery could materialize, reducing the probablility of his below-consensus $195 base case for earnings per share in 2023.

Info via a (gated) Bloomberg report.