TechFlow News, June 15: Morgan Stanley strategists stated that U.S. equities may receive an additional boost from a rotation of capital into cyclical, economically sensitive sectors—which lagged during the Iran conflict.
The team led by Michael Wilson noted that reports of increased traffic through the Strait of Hormuz, along with signs that interest rates, oil prices, and the U.S. dollar—previously weighing on equity markets—are easing or stabilizing, could propel undervalued stocks into the market’s top-performing group. Until recently, market gains had been highly concentrated in high-growth technology stocks. The S&P 500 Index is currently just about 2% below its all-time high.
Wilson said the recent pullback in U.S. equities was primarily driven by declines in memory-chip stocks, attributable to slowing earnings momentum rather than deteriorating fundamentals. Such corrections following a strong rally are common in earnings-driven bull markets. Wilson added: “Markets may remain volatile over the coming weeks, but our confidence in the current bull market remains intact.” (Jinshi)
