Prepare for the biggest stock-market selloff in months, Morgan Stanley warns

[EricMaundry]

The U.S. stock market has been partying all throughout July, and a hangover is coming.

That is according to analysts at Morgan Stanley, who said that Wall Street’s rally is showing signs of “exhaustion,” and that with major positive catalysts for trading now in the rearview mirror, there’s little that could continue to propel equities higher.

“With Amazon’s strong quarter out of the way, and a very strong 2Q GDP number on the tape, investors were finally faced with the proverbial question of ’what do I have to look forward to now?’ The selling started slowly, built steadily, and left the biggest winners of the year down the most. The bottom line for us is that we think the selling has just begun and this correction will be biggest since the one we experienced in February,” the investment bank wrote to clients.

The decline “could very well have a greater negative impact on the average portfolio if it’s centered on tech, consumer discretionary and small-caps, as we expect.”

https://www.marketwatch.com/story/prepare-for-the-biggest-stock-market-selloff-in-months-morgan-stanley-warns-2018-07-30

[yallerdawg]

1. "We have accomplished an economic turnaround of HISTORIC proportions!"

Day 2:

[saidsimplesimon]

2. What's in this for Morgan Stanley?

Do they have heavy bets placed that the Stock Market will decline? Will their pension fund managed accounts start the stampede?

[kurtcagle]

3. MS is likely getting ahead of short positions

I have had the opportunity to work (as an IT person) with their analysts, and they are generally spot on, and of course looking to position themselves to best take advantage of it.

I think we are approaching the event horizon of a retail/tech recession, one that will only accelerate as gas prices climb, the tariffs began to work their way through the economy and the tax giveaway's effects fade. The bull market that began in April 2009 is now nine years old, making it one of the longest on record, and the massive wealth imbalance we see today is largely a symptom of a market where malinvestment has become the norm (things like stock by-backs, typically followed by executives cashing out). Trump likely accelerated this - the one time stimulus of the tax was minimally effective, and a lot of fiscal conservatives are getting very nervous about how their cultural conservative brethren are partying like there was no tomorrow (see latest Koch temper tantrums).

[dixiegrrrrl]

9. No big secret the market is overvalued by more than half.

They've tried everything to get it to stay up, those stock buyback- pump tricks were pretty obvious.

People scoff at bit coin because it has nothing of value behind it, but they never think twice about all the billions of dollars
supposedly behind the value of companies that have been bought and sold in micro seconds by whiz bang computers trading with each other, thereby pumping up prices and "value" based on nothing more than an increase in the stock prices.

[still_one]

4. I don't believe a f**king word these analysts say. While the market may well have a sell off or

worse, it won’t be because of any special insights these analysts have

Protectionism, trade wars, and protectionism, and the rantings of the “fearless leader” lunatic in the WH, are the obvious clouds that the market has been ignoring and making excuses for some time now, so is this really news that something may happen?

[Crutchez_CuiBono]

5. "What have I to look forward to now?" What about, what can you do for someone else...for a change.

[Omaha Steve]

6. Third warning I've hear in the last two weeks

I just moved some things around.

[roamer65]

7. Stock market crash this fall.

If Dump escalates the trade war.

[DemocratSinceBirth]

8. Wait for Trumpists to say markets don't matter after spending two years saying they do.

They are so transparent.