Morgan Stanley’s 2020 year-end price targets for the S&P 500 are exactly what they were in December because they were already assuming this year would likely include a recession, albeit a much milder one.
Key quotes
“The monetary policy response has been effective in stabilizing credit spreads and equity risk premiums, which reached the same level for the S&P 500 observed at the lows of the Great Financial Crisis. Therefore, it’s unlikely we will approach the same levels again anytime soon.”
“The policy response is like nothing we’ve ever seen either. And that means a V-shaped recovery next year is likely, which is what stocks are already starting to discount.”
“In S&P500 terms, a 200-week moving average of 2650 should provide very strong support on what could be a choppy few weeks as companies give us the bad news on earnings and there is more political posturing as states try to decide when to reopen.”
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