Stocks have rallied since June. Will the bear market rebound last? Mike Wilson, Chief Investment Officer and Chief US Equity Strategist for Morgan Stanley, offers his perspective.

Earnings estimates likely to fall further

“While there are some strong indications that inflation has peaked from a rate of change standpoint, it's too soon for the Fed to declare victory in our view. In other words, the rising hope for the Fed to pivot away from rising rates or curtailing its balance sheet reduction remains optimistic.”

“Now, with the price earnings multiple exceeding 18x last week, valuations are inappropriate if one agrees with our view that earnings estimates are too high.”