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Morgan Stanley’s Market Optimism a Glass Half-Full

April 14, 2017

Morgan Stanleys startling call for a fat run-up in stock prices this year isn’t as contrarian as it looks at first, writes Investopedia.

The Wall Street firm’s new U.S. strategist Michael Wilson is calling for a 15% gain — or nearly 30% in a best-case scenario -- on the S&P 500 this year, CNBC reports.

But that’s not because he sees no end in sight to a bull run that began way back in March 2009. Rather, he says, it’s owing to the fact bull markets historically run way up just before they rush back down again, CNBC writes.

“Although optimism is a late cycle phenomenon,” Wilson writes, “history tells us the best returns often come at the end.”

In other words, think 1999. Or think 2007.

As Investopedia sees it, Wilson isn’t bucking the gloomy consensus that this bull market’s days are numbered as much as he’s putting a tentative number on that demise: 2018.

Exuberance about U.S. President Donald Trump’s pro-business agenda may be helping things along, says Investopedia, interpreting Wilson’s logic. But that’s not as big a force as the ongoing global snap-back from the depth of a series of economy-shaking financial crises that started 10 years ago.

Still, all good things must end — though not, according to Wilson at least, without a nice pop on the way out.

By Thomas Coyle
  • To read the CNBC article cited in this story, click here.
  • To read the Investopedia article cited in this story, click here.