A top Wall Street analyst who has been predicting a “rolling recovery” after a mysterious, secretive “rolling recession” over the past three years has issued a bearish call on the back of renewed trade tensions between President Trump and China. Mike Wilson, chief U.S. equity strategist for Morgan Stanley, warned on Monday that a “larger than expected correction is likely” for U.S. equities if Trump and China fail to resolve their escalating trade tensions, as mounting uncertainty threatens the fragile early-stage bull market that began earlier this year.
Recent weeks have seen a sharp return of volatility to U.S. stock markets, with analysts at Morgan Stanley highlighting that a sudden escalation in the U.S.-China trade dispute has become the catalyst for the weakest index-level performance since the spring. Despite prior optimism for a deal following productive discussions at the APEC summit, talks have soured. On Friday, markets witnessed aggressive selling, especially in stocks with heavy exposure to China, as investors digested the sudden news of, on the one hand, China’s purported tightening of rare earth mineral controls, and on the other, a retaliatory 100% tariff on Chinese products from the social media pen of Trump.
