A popular belief claims stock markets hit their peak in January 2018. In March 2009, a bull market rose from the ashes of the Great Recession. The bulls hit a feverish rate of investment from late 2016 until January of this year. Most people believe the current bull market is coming to a close within the next year or two. Recently, Morgan Stanley revealed its opinion that the market will start to pull back before 2018 ends.
Morgan Stanley Warns Of A Market Pullback
Before the market turns bearish, Morgan Stanley expects one last rally in the summer. Markets will then hit a peak and start to retreat for the foreseeable future. Officials at Morgan Stanley don’t expect a major downturn. However, the company sees the market entering a period of caution and bearish performance. Various indicators led Morgan Stanley to its revelation, and the warning signs make sense.
The Conditions For A Slowdown Are In Effect
For instance, economic growth worldwide is expected to slow, and that’s not just Morgan Stanley’s opinion. Inflation is beginning to rise, and the Federal Reserve intends to keep raising interest rates moving forward. Also, Washington continues to choose tariffs and trade wars rather than tax cuts. Such indicators point toward slow growth and rougher market conditions for investors, meaning the bears could break in.
Morgan Stanley’s Expected Timeline For The Markets
Morgan Stanley is operating under two possible realities right now. Either the markets topped out earlier in January, or the top is coming during the summer. After the market hits the ceiling, the company expects the market to turn bearish for the months to come. Morgan Stanley doesn’t know how long a bear market would last, but it’s not the only company expecting the markets to turn around and hit an impasse.
Multiple polls have shown that analysts and investors believe the bull market will end by 2020. Currently, only a small number of investors expect the bull market to continue on for the years to come. Worldwide economic conditions point toward restrained stock market performance sooner rather than later. Then again, companies continue to post record profits with each passing quarter.
Morgan Stanley itself admits the company has based its predictions on past performance of the stock market. The company also notes the timeline of its predictions is fluid. In the end, a downturn might not come right on time.