After the inflation report, the leading Wall Street strategists point out the growing risks to the US revenues and the stock valuation.
Michael J. Wilson of Morgan Stanley and David J. Kostin of Goldman Sachs Group Inc. suggest that the factors, impeding the stock’s growth, are increasing, and also highlight the tightening of monetary policy and the pressure exerted on the companies’ margins as the main problems.
“The hot inflation data triggered concerns about the prospects for the stock valuation and profitability”, – reported Kostin from Goldman. His team is awaiting the S&P 500’s net profit margin to fall down by 25 basis points in 2023.
Meanwhile, Wilson and his team “continue to recommend owning more defense-oriented companies with stable revenues and high operational efficiencies”.
Michael Hartnett, the strategist at Bank of America Corp., reiterated the Morgan Stanley’s point of view, announcing that this year the US haven’t yet experienced the worst fall in the background of scorching inflation and hawkish policy of the Fed. Hartnett and his team are expecting that the revenue recession will lead the stock to new lows.
Source: Bloomberg.com
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