Morgan Stanley Analyst Cries Wolf, Predicts Prolonged Dow Earnings Hell

Get Exclusive Analysis and Investing Ideas of Future Assets on Hacked.com. Join the community today and get up to $400 in discount by using the code: “CCN+Hacked”. Sign up here.
Get Exclusive Analysis and Investing Ideas of Future Assets on Hacked.com. Join the community today and get up to $400 in discount by using the code: “CCN+Hacked”. Sign up here.

Morgan Stanley analysts must have gotten up on the wrong side of the bed. They have issued a doom-and-gloom report about corporate earnings, choosing to focus on the glass half empty while other forecasters manage to see it half full. The Wall Street firm is predicting an “earnings recession,” which translates into at least two straight quarters of hell for stocks and the Dow Jones Industrial Average.

While most analysts expect that Q1 results will be excruciating, they can also see a light at the end of the tunnel. The consensus view is that earnings growth will return in Q2, green shoots of which have already begun to emerge. Morgan Stanley Analyst Michael Wilson, however, is much more negative. His report is cited in CNBC:

“This is where the rubber will meet the road for stocks. We’re comfortable saying that the stock market is well aware of the weaker earnings growth expected this quarter. However, the real question at this point is what the second half of the year will look like.”

Morgan Stanley Analyst Cries Wolf, Predicts Prolonged Dow Earnings Hell 1

Source: CNBC

Analyst Cries Wolf

If you’re an investor, the last thing you want to hear is that the Dow or S&P 500 indexes are stuck in the doldrums for the foreseeable future. Unfortunately, that’s what the Morgan Stanley report is saying. While Wilson seems fine to believe that market conditions are worse than anticipated, he fails to extend that same courtesy to the possibility that things are improving.

The R word has been tossed around quite a bit of late in light of the global economic slowdown. While the glass-half-full economists maintain that the likelihood of contraction actually happening is slim to none, an earnings recession would be similarly damaging to sentiment. Investors have already priced Q1’s woes into stock prices, and estimates have been adjusted to reflect lowered expectations. Wilson is making no provisions for upside surprises, which, if he’s right, is not good news for the Dow, S&P 500, or the Nasdaq.

“[A] lowered bar into the quarter does not mean the likelihood of a beat is greater. The forecasts for 1Q19 have been lowered substantially and we do not think we are going to see a beat big enough to lift index growth into positive territory.”

Fortunately for investors, Wilson has cried wolf before.

Earnings Recession Fears Are ‘Overblown’

Other Wall Street firms have considered the possibility of an earnings recession but have come to better conclusions. Credit Suisse reportedly believes that the earnings recession will be averted, while Bank of America Merrill Lynch is forecasting profit growth in Q2.

Canaccord’s Tony Dwyer believes that the worries stemming from earnings recession are”overblown,” he told CNBC. Corporate America hasn’t suffered a negative earnings quarter since 2016. Nonetheless, Dwyer points out that at the time, both profits and revenues suffered. This time, companies are expected to report rising revenues despite profit declines.

The banks kick off Q1 earnings season on Friday.

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews

Crypto Scams

Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
April 23, 2022
Prove
Joon Pak Head of Crypto at Prove talks to Us about Crypto Fraud And More
April 11, 2022
Mintable
Mintable CEO Zach Burks Talks to Us about the Opensea Stolen NFTs and Their Recovery
March 21, 2022
Crypto Crime
Crypto Crime Surges To Record Highs As Thieves Follow Market Buzz – Chainalysis 2022 Report
February 24, 2022
Bots Circumvent 2FA Login At Coinbase And Other Crypto Exchanges In 2022
Bots Have Circumvented 2FA Logins At Coinbase And Other Crypto Exchanges In 2022
February 17, 2022

Automated trading with HaasBot Crypto Trading Bots

Blockchain/Cryptocurrency Questions and Answers

Russia
Roundtable Interview-What is the Effect of The Russia-Ukraine War on Cryptocurrency Prices?
March 4, 2022
GamStop
How Does Bitcoin Casino Work + 2021 Beginner’s Guide
November 8, 2021
Cryptocurrency
How to Buy and Sell Cryptocurrency
November 8, 2021
What Are Bitcoin Futures And How Will They Work In 2022?
November 4, 2021
Ethereum
The Unconventional Guide to Ethereum
October 28, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin29,259 1.40 % 1.67 % 1.69 %
Ethereum1,843.9 4.38 % 6.61 % 3.72 %
Tether0.9996 0.03 % 0.05 % 0.06 %
USD Coin0.9989 0.16 % 0.08 % 0.04 %
BNB313.83 2.30 % 5.23 % 8.87 %
XRP0.3888 2.46 % 3.64 % 4.34 %
Binance USD0.9983 0.09 % 0.33 % 0.34 %
Cardano0.9566 0.22 % 0.68 % 6.96 %
Solana44.48 3.86 % 9.15 % 10.62 %
Polkadot9.360 3.94 % 6.36 % 1.67 %

bitcoin
Bitcoin (BTC) $ 29,740.00
ethereum
Ethereum (ETH) $ 1,927.50
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 321.50
usd-coin
USD Coin (USDC) $ 1.00
xrp
XRP (XRP) $ 0.398312
binance-usd
Binance USD (BUSD) $ 1.00
cardano
Cardano (ADA) $ 0.504967
solana
Solana (SOL) $ 46.40
polkadot
Polkadot (DOT) $ 9.73