MW Here's the level that could be an attractive entry point for stocks, says Morgan Stanley's Mike Wilson

By Steve Goldstein

Morgan Stanley sees S&P 500 support as entry point soon

It's been a rough three weeks for major markets and particularly some of the most popular stocks.

Morgan Stanley's top stock-market strategist, Mike Wilson, identifies no shortage of culprits. "Policy uncertainty, fiscal drag, DOGE, immigration enforcement and the lagged impact of higher rates and a stronger dollar have come together to pressure earnings revisions," said Wilson in his latest note to clients, of the selling that's dragged the S&P 500 down by 6% and the Nasdaq Composite into a correction.

But he also identifies the point where investors might find an attractive entry point to get back in the market.

Wilson says equity markets feel oversold and the S&P 500 SPX bottomed right at the 200-day moving average on Friday, "providing a technical sign of relief after a rough week."

But more than technicals, Wilson points out the 10-year yield BX:TMUBMUSD10Y has come down by about 50 basis points since the middle of January. Rates have tended to lead the economic surprise index by about two months, so that means that there should probably be upside in the economic surprise index to come.

Also, the dollar DXY strength which weighed on earnings in the fourth quarter is now reversing.

Finally, Wilson notes that seasonal factors both for earnings revisions and equity market performance improve in March.

"This all suggests that price action at the lower end of the aforementioned range (toward 5,500) is likely an attractive entry point assuming one is willing to tolerate continued volatility over the next several months," said Wilson of the S&P 500.

Stock-market futures on Monday suggested the volatility wasn't about to end, with the lead S&P 500 contract (ES00) down over 1%.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 10, 2025 05:10 ET (09:10 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.