Many people expected the stock market to rise at the end of the year. But a smart person at Morgan Stanley, Michael Wilson, says that might not happen.
He said: “We are not very likely to see the stock market rise much in the latter part of the year.” Wilson is really good at figuring out how to invest money and a big survey says he’s the best at it.
Wilson has been saying for the past three months that he is not very positive about the stock market. This is because people are worried about rising interest rates. On Friday, something called the S&P 500, which measures how well the stock market is doing, went down a lot. It was 10% less than before.
Now, people are looking at how much money companies are making. This helps them guess how well the stock market will do in the future. They are also looking at how well companies can handle things like higher interest rates.
Wilson thinks people expect companies to make too much money in the latter part of this year and into 2024. Although the economy is doing well, he doesn’t think things will be going that well. He also says the government may not be able to help much and might even make things stricter. He also believes that many companies may not make as much money as people think.
Wilson also believes that the government raising interest rates is starting to have an effect on the economy. Some types of companies that are sensitive to interest rates have fared worse lately, while other types that are more stable have fared better, especially in the energy sector.
That’s why Wilson believes that right now people are more concerned about how much the economy is growing than about interest rates and how much companies are worth.
Also read: Economic turbulence: US interest rates rise, global markets react