‘Grizzly Bear’ Has One Question: ‘Is It Done Going Down?’
"The question is whether it's done going down," Morgan Stanley's Mike Wilson, who Bloomberg hyperbolically described as a "grizzly bear," wrote Tuesday.
He was referring to stocks, but only tangentially. What's "going down" is ISM manufacturing, and if the economy is merely experiencing a mid- to late-cycle slowdown, it should stop right where it is, at 53.
June's ISM print, which landed in thin, pre-holiday trading last week, was variously pitched as evidence to support a recession narrative
“Even in a soft landing scenario… Morgan Stanley thinks NTM EPS estimates would fall as low as $225″…I’ve made this comment before, but when pretty much everything was going well if not great in worldwide economies in 2019 (after ~10 years of mostly growth) the S&P500 made all time record high earnings of ~$135 in December 2019. And yet with pandemic stimulus mostly spent and with all the stresses now afflicting worldwide economies, S&P500 earnings are projected to remain ~67% higher than the all time pre-pandemic record of $135?
I find this hard to comprehend.