U.S. stocks remain close to record levels after a strong earnings season, but Morgan Stanley strategists have outlined a scenario that would take the S&P 500 down to 7,100 if higher energy prices and tighter financial conditions put additional pressure on valuations.
A team led by strategist Michael Wilson said the benchmark index could fall to the mentioned level under those conditions. S&P 500 valuations have declined over the past four months to their lowest level since March even as better-than-expected company results have helped the market withstand a sharp rise in bond yields, Bloomberg noted on Monday.
