Posted 3/11/2024, 10:44:52 AM
Stocks Surge on Liquidity and Stimulus, But Morgan Stanley Warns Growth Needed to Sustain Rally
- U.S. stock indices have grown strongly since October, but further gains may require an earnings boost according to Morgan Stanley
- Rally attributed to easing financial conditions, increased liquidity, fiscal support, and overly bearish consensus last October
- Fundamentals remain ambiguous - solid aggregate economic data but some sluggish indicators suggest soft landing not strong 2H rebound
- Lack of 2H growth rebound could be headwind for economically sensitive stocks
- If Fed holds off on rate cuts longer than expected, could also serve as market headwind