Investors have pushed stocks into the death zone
Warns Morgan Stanley’s Mike Wilson
“Investors began to move faster and more energetically, talking more confidently about a soft landing for the U.S. economy. As they have reached even higher levels, there is now talk of a ‘no landing’ scenario – whatever that means. Such are the tricks the death zone plays on the mind – one starts to see and believe in things that don’t exist,” says Wilson.
Back to Wilson, who says the P-to-E ratio is now 18.6, and equity risk premium at 155 basis points, meaning “we are in the thinest air of the entire liquidity-driven secular bull market that began back in 2009.”
He says the bear market rally that begin in October from reasonable prices has turned into a speculative frenzy based on a Fed pause/pivot that isnt coming.
Steve Goldstein MarketWatch 20 February 2023
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