Morgan Stanley predicts market correction nearing end

Morgan Stanley predicts the end of the correction in the US stock markets, indicating that the market is moving toward the mid-phase of the economic cycle rather than entering a full recession. The firm notes that investment indicators show a shift toward financially strong companies, with increasing upward revisions for high-quality corporate earnings, which enhances the likelihood of their outperformance by over 7.5% next year. It also states that tightening financial conditions, rising bond yields, and a stronger dollar have resulted in nearly a 10% loss in economically sensitive stocks, and that the end of this correction depends on the transition of AI investments from providers to the deploying companies.

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