Thomson Reuters
- The rally in stocks is a "bull trap" and investors have more pain coming, Morgan Stanley warned.
- That's because earnings-per-share estimates over the next year haven't bottomed yet, and neither have stocks.
- The downside could come as soon as March, as the S&P 500 is at a critical testing point.
The stock market rally in 2023 is a trap, and more pain is coming for investors in March, according to Morgan Stanley.
"With the equity market showing signs of exhaustion after the last Fed meeting, the S&P 500 is at critical technical support. Given our view on earnings, March is a high risk month for the bear market to resume," a team of strategists led by Mike Wilson said in a note on Monday.