S&P 500: Attractive risk-reward buying opportunity – Morgan Stanley

Ending the year at around 2750 for the S&P 500 would imply lingering issues beyond a garden-variety recession that currently seem unlikely, economists at Morgan Stanley apprise. Key quotes “We still think that 2750 may be a reasonable year-end bear case for the S&P.” “We've been watching 2550-2600 as a level for the S&P in an overshoot—a level the S&P has already traded below. Further investor reductions in gross exposure could push the liquidity-driven overshoot further than we expected.”  “For investors with a 6-12-month horizon, the 2550-2600 level may offer an attractive risk-reward buying opportunity.”