This year started with a strong rally in the markets, but the past month has seen the positive sentiments start to sputter. The failure of Silicon Valley Bank started fears of a contagion and consequent bank runs, which were only partially offset by Federal regulatory actions. But there’s a growing consensus that it was the Federal actions that set the conditions for the bank crisis, when the central bank raised interest rates to fight inflation. Now, investors are trying to cope with the fallout: a simmering bank troubles, persistent high inflation, and elevated interest rates.
But not all is doom and gloom. According to Mike Wilson, the chief US equity strategist at Morgan Stanley, what we’re seeing now may herald the beginning of the end in the bear market. While the market is volatile, Wilson describes a positive set-up for investors looking to hold stocks for the long-term.