Morgan Stanley Strategist Sticks to S&P 500 Crash Call as Breadth Weakens and Stocks Teeter at Key Levels

Morgan Stanley's Michael Wilson is sticking by his call for the S&P 500 to fall 10% to 3,900 by January. He cites weak market breadth, waning consumer confidence, and fading earnings optimism.

The S&P 500 is stuck between technical support and resistance levels at its 50-day and 200-day moving averages. A breakout could spark more selling.

The average stock is faring much worse than the market-cap weighted S&P 500 index. Equal-weighted and small cap indexes are negative year-to-date.

Breadth indicators like percentage of stocks above their 200-day average are deteriorating. The average stock recently saw a "death cross."

Wilson is not alone in noting weak performance in areas beyond mega-cap tech. Excluding "Magnificent Seven" stocks, the S&P 500 recently hit 2022 lows.