S&P 500 Index: Primed for a correction? – Morgan Stanley

Dhwani Mehta FXStreet

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. “

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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