Major U.S. stock-market strategists are starting a bull-bear debate, with pessimist Michael Wilson of Morgan Stanley warning that the latest rally is a head fake, while Bank of America's Savita Subramanian raises her 2023 target for the S&P 500 Index.
Wilson was one of the few Wall Street strategists to see the 2022 meltdown coming, earning him the top spot in last year's Institutional Investor magazine survey, and has remained one of the most bearish voices in the market even as the S&P rallied 9% to start 2023.
At this point, he sees too many troubling triggers to believe the gains will stick.
"Is this finally the breakout to confirm a new bull market?" Wilson wrote in a note to clients Monday. "The short answer is no." In particular, he sees risks in lofty valuations, a narrow breadth of stocks driving the gains and the outperformance of defensive stocks.
But where Wilson is looking at a half-empty glass, Subramanian says she sees a "half-full" one. She raised her 2023 year-end price target for the S&P 500 to 4,300 from 4,000. The equities benchmark topped 4,200 on Friday before drifting lower.
