Morgan Stanley’s Chief Investment Officer (CIO) says the S&P 500 likely has more upside potential.
In a new Bloomberg interview, Mike Wilson say the index could rise almost 14% from current levels by the end of the year.
According to Wilson, two catalysts could trigger the rally, with the first being capital expenditures in the artificial intelligence (AI) sector.
“I think we have a new candidate for Fed chairman in Kevin Warsh… We think that once he comes into power, this will be another catalyst for why the market can have a very good second half.
And we remain committed to our target of 7,800 for the S&P by the end of this year.”
Wilson says the stock market will also benefit from a broader spread of economic growth.
“So we’re not only in a new revenue cycle, but we’re also in a new economic cycle. And that’s why we’re seeing the broadening now, because many parts of the economy have been in some kind of recession over the last three years. And they’re just now starting to emerge.
Areas such as consumer goods. Part of the financial sector. The industrial sector clearly only got a boost from AI capital spending, but it also got a boost from actual underspending in recent years. Parts of the technology are still doing quite well. And that expansion is the real story.”
The S&P 500 is at 6,837 points at the time of writing.
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