- Stocks have rallied in the face of worsening earnings and economic expectations, producing “massive disconnects” that threaten market stability, warned Lisa Shalett at Morgan Stanley Wealth Management.
- The performance ratio of cyclical versus defensive stocks has never been as out of sync with the leading economic indicators as it is now.
- A technical-driven rally has made the market deviate from the fundamentals.
- The latest rush by investors into short-dated options is another sign that money is still easily available.
- Fed Chair Jerome Powell has in recent weeks brushed off the market rally, but other policymakers may embrace tougher talk to put a lid on equity gains.
Morgan Stanley's Shalett Sees 'Massive Disconnects' in Stocks
Stocks have rallied in the face of worsening earnings and economic expectations, producing “massive disconnects” that threaten market stability, warned Lisa Shalett at Morgan Stanley Wealth Management.
Lu Wang
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