Morgan Stanley’s Wilson Is Among Top Stock Bulls With Call for 16% S&P Rally

Core Viewpoint - Morgan Stanley strategist Michael Wilson predicts a 16% rally for the S&P 500 Index over the next year, driven by strong corporate earnings, with a target of around 7,800 points by the end of 2026, indicating a fourth consecutive year of double-digit gains for the index [1]. Group 1: Earnings Expectations - S&P 500 earnings per share are expected to increase by 17% and 12% in the next two years, attributed to improved pricing power, efficiency from artificial intelligence, favorable tax and regulatory policies, and stable interest rates [2]. Group 2: Market Context - The S&P 500 has experienced significant gains, exceeding 20% in each of the previous two years, and is currently near all-time highs following better-than-expected third-quarter earnings [4]. - Despite the bullish outlook, there are concerns from other strategists, such as Goldman Sachs' Peter Oppenheimer, who anticipates US stocks will underperform international markets over the next decade due to high valuations [5]. Group 3: Historical Performance and Sentiment - Wilson maintained a bullish stance even during market downturns, successfully predicting a rebound as trade tensions eased under President Trump [3]. - Investor confidence in economic growth persists, despite concerns regarding high AI valuations and risks associated with the longest US government shutdown [4].