Chief U.S. stock strategist at Morgan Stanley: No matter who wins the U.S. mid-term elections, everyone should buy on dips
Quick Look
- Wilson, chief U.S. stock strategist at Morgan Stanley, pointed out that although mid-term elections, AI spending pressure and liquidity restrictions may lead to a short-term correction in the S&P 500 index, historical data shows that the market usually goes higher after the election.
- Investors are advised to buy on dips and are optimistic about the S&P 500 at 8,000 points.
AI-generated summary
Why It Matters
Morgan Stanley analyzed market performance after the U.S. midterm elections based on historical data. Historical records show that markets typically trend upward six to 12 months after an election.
Bloomberg reported that Mike Wilson, chief U.S. stock strategist at Morgan Stanley, pointed out that no matter which political party wins the U.S. midterm election, investors should buy on dips.
He pointed out that there will be some "clearing events" in the market in the future, which may cause the stock market to fall temporarily, but will also create good entry opportunities for investors.
He pointed out that several things could cause the S&P 500 to plummet 9% from the swing high to 7,100 points, mainly the midterm elections, artificial intelligence (AI) spending pressure, and liquidity constraints.
However, even if the uncertainty of the Iran war has hit the U.S. stock market from time to time, he is still optimistic about the development of U.S. stocks, believing that after these "cleaning events" bring an end to the correction that lasted for several months, the S&P 500 may rise to 8,000 points.
Regarding the U.S. midterm elections held on the 3rd, he said that midterm elections have always been a "headwind", but after the elections, the market always goes higher. According to records tracked by Morgan Stanley, the market is almost 100% higher between 6 months and 12 months after the election, but it may not always go higher between November and December 31. 2018 is a good example.
He also pointed out that this midterm election is a little different from the past, because President Trump said that he may launch some major actions after the election. This is a typical Trump style, like "I want to do something big, but no one knows what it is." This uncertainty affects investors.
However, based on past records, although bad things happened at some points in the midterm elections, they were eventually resolved, so the market may fall first and then rise. He said he was fairly certain that there would be at least six months when the market was doing pretty well, and it could even last 12 months, meaning that the market would rebound after the midterm elections.
What to Watch
AI outlook — possibilities, not facts
S&P 500 could rise to 8,000 after cleanup event
Possible · Within months
Open Questions
- What are the specific contents of the major actions Trump may take after the election?
- How much impact does AI spending pressure actually have on corporate profits?
