Morgan Stanley Strategist Predicts Year-End Rally But Sees Stocks Ending 2023 Lower

Morgan Stanley's chief strategist Mike Wilson predicts a year-end stock rally but believes stocks will end 2023 lower than current levels.

Wilson notes defensive stocks are outperforming which reflects a "cautious tone" in the market underneath recent gains.

Falling earnings revisions and fading consumer confidence reduce odds of a 4th quarter rally, per Wilson.

But Wilson acknowledges investors are still bullish, which could fuel a rally to avoid missing out on mega-cap gains.

Wilson has been Wall Street's biggest bear, forecasting a 10% drop in stocks by year-end, though he admits being wrong earlier this year.