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Mike Wilson Says Bah Humbug To Santa Rally
Morgan Stanley's Mike Wilson isn't convinced US equities are poised for a "Santa rally."
Wilson on Monday cautioned on market breadth, a familiar concern in a year when a handful of mega-caps are responsible for the lion's share of index performance.
"The S&P 500 Equal Weight Index and Russell 2000 [are] down on the year and closer to the bear market lows last year than the bull market highs in 2021," Wilson remarked.
Wilson called that "a more holistic view of the YTD price action."
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Consumers are still spending. Companies still hiring. I suspect Q3 results will disappoint equity bears again.
I visited my daughter and son-in-law in LA this weekend- airports were packed and restaurants were quite busy.
My son-in-law told me that the rent vs. buy analysis in LA is currently such that owning is almost twice as expensive as renting for the equivalent space. They have decided to stay in her 1 bedroom and use the cash they would have otherwise spent on a home to save for a future, larger down payment (when, hopefully housing prices are not so high) and also spend more on travel/enjoying life than they would have been able to do if they had jumped into homeownership.
When I multiply this thought process across many people, aged 25-35 in the US, this has to be one of the current drivers of the economy.
Having said that, I could never live in LA- besides being “LA”, the homeless/ drug problem is very bad….maybe while saving for a down payment, they will come to their senses 🙂
Los Angeles is a fantastic town. Don’t be such a humbug @empty
I will try- however, I have been visiting LA 2-3 times/year for the past decade and the conditions in LA have worsened significantly over this time period (imho).
H-Man, seems to be talking about the coming recession, it will be bad, not sure now is the move or any reason to doubt Santa. Q1 and Q2 will tell the tale of what we see in 2024 which banks on the consumer showing up. No consumer, you know the drill.
Wilson’s been wrong all year. I don’t really see any compelling evidence to think he’s right this time.