In the view of the analysts at Morgan Stanley, the S&P 500 Index looks vulnerable, as it is due for a correction over the coming weeks.
Key quotes
“The S&P500 has been surging mainly thanks to a handful of strong gainers.
Thus, its vulnerable to shocks, particularly rising rates.
The drive higher due to the few is nothing new.
We expect a growth scare to be followed by a rate scare over the next weeks/months that could finally give us the first tradable correction in the major US equity indexes.
Could begin imminently.
More stimulus from Congress (in a range of $2 to $2.5 tln) if economic reopening stalls may spur a sharp increase in long-dated rates.
Market is not prepared for this. “
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