Morgan Stanley, Goldman Say Fourth Quarter Stock Rally Is Looking Iffy
Morgan Stanley, Goldman Say Fourth Quarter Stock Rally Is Looking Iffy. It’s the S&P 500’s habit of rising in the fourth quarter, something that has happened during eight of the last nine years. But counting on the calendar to bail U.S. stocks out of their latest October slump may be asking too much, according to strategists at Morgan Stanley and Goldman Sachs. Mike Wilson at Morgan Stanley urged investors to stay put, calling rallies such as last Tuesday’s “a dead cat bounce.” Technology and consumer-discretionary stocks, market leaders in the past few years, may need to fall an additional 6 percent to 8 percent before bottoming, he said. “The extent that the typical 8 percent S&P 500 rally during 4Q of midterm election years – twice the median return of 4 percent in other years – is driven by declining uncertainty, that pattern may be less likely to repeat this year.”. For more articles like this, please visit us at bloomberg.com.