Morgan Stanley remain unconvinced on US equity market strength. These from a Monday (US time) note to clients:
- “Bottom line, from a technical standpoint, last week’s price action showed signs of panic buying, in our view.”
- “Rather than a short squeeze , the market was driven by the biggest winners as more market participants convinced themselves the next bull market may have begun and they can’t afford to miss it.”
- “In short, we believe this rally will prove to be a head fake like last summer’s.”
- "there are many technical signals that conflict with the idea that this is the beginning of a new cyclical bull market—extreme narrowness (poor breadth), quality/defensive leadership, and broad cyclical underperformance"
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