Morgan Stanley sets end-2022 S&P 500 target at 4,400

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NEW YORK, Nov 15 (Businesshala) – Morgan Stanley analysts expect the S&P 500 to decline in 2022, with more volatility in equity markets as earnings growth slows, bond yields climb and companies see supply chain disruptions and more. Try to manage high input cost.

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In a note on Sunday, the firm said it was underweighted by the benchmark S&P index, because of slower per-share growth and higher opening valuations than its global peers, and a 5% decline in its base-case target of 4,400. was likely.

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From an earnings per share (EPS) perspective, Morgan Stanley sees the best growth next year in Europe and Japan, while the firm is neutral on emerging markets.

While the firm still expects solid EPS growth next year, “the uncertainty around that expectation increases materially with cost pressures, supply issues as well as tax and policy uncertainty that is unique to the US,” Analysts wrote in the note. With the rest of the world lagging behind the US recovery, the firm sees more “catch-up” potential and less earnings volatility elsewhere over the next 12 months.

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While Morgan Stanley expects the S&P 500 to be solid as a whole, chief U.S. equity strategist Michael Wilson expects a “significant” earnings spread at the stock level, which makes the year more about stocks than sectors or styles. makes.

Still, with the expectation that sectors and styles will be more volatile, the firm continues to weigh more than healthcare, real estate and financials. Consumer discretionary, more specifically stocks that are good-oriented, have an underweight, as is tech hardware. (Reporting by Chuck Mikolajczak Editing by Mark Potter)

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