Stock Rally Over Without Growth Boost: Morgan Stanley's Wilson

The other outcome is a soft landing with accelerating nominal growth.

This bullish view has gained probability share after last month’s meeting of the U.S. Federal Reserve, according to Wilson.

The final scenario is a hard landing, with recession odds currently still above average as several soft and hard macro data series remain depressed relative to history. Against this backdrop, traditional defensives would outperform, he said.

Other Wall Street strategists have been warning that U.S. equities are due a pause after last quarter’s sharp gains.

Nonetheless, several, including those at Goldman Sachs Group Inc. and Bank of America Corp., still expect the S&P 500 to set new record highs this year. Most recently, RBC Capital Markets strategist Lori Calvasina raised her target to 5,150, implying the index will gain about 10% through 2024.

Wilson has maintained his 2024 target of 4,500 for the S&P 500 since November. The index closed Friday at 4,697 points.

Pictured: Michael Wilson of Morgan Stanley. Photo: Bloomberg