Weak US Job Data Could Lift Stocks, Says Morgan Stanley’s Wilson

Group 1 - Moderate weakness in US job numbers may increase bullish sentiment towards stocks by raising the likelihood of further Federal Reserve interest-rate cuts [1] - The labor market's strength could lower the probability of rate cuts extending into 2026, indicating a "good is bad/bad is good" regime [2] - Upcoming US economic readings, including delayed employment numbers and consumer inflation figures, are expected to provide insights into the labor market's condition [3] Group 2 - The MSCI All Country World Index reached an all-time high following the Fed's rate cut, with the S&P 500 and Nasdaq 100 benefiting from AI advancements and accommodative monetary policy [4] - Fed Chair Jerome Powell expressed optimism about the US economy, projecting a growth rate of 2.3% for next year, an increase from the previous 1.8% forecast, while inflation is expected to slow to 2.4% [5] - Citigroup strategists predict a 12% increase in the S&P 500, targeting 7,700 points by the end of 2026, driven by strong earnings and expectations of easing monetary policy [6]