The Blubber

Per Business Insider

Morgan Stanley's Mike Wilson gives his thoughts on the current state of the stock market, saying it is now in a "death zone" with predictions of its potentially massive drop. Wilson estimates that the S&P 500 could drop down to 3,000 points within the month, which is a 26% slump.

Wilson said that US stocks have reached "unsustainable heights" and that investors were like climbers who were pushing towards the top without being able to consider the risks properly. The move by investors was likened to "blindly" pushing toward the top of Mount Everest.

Wilson: "Many fatalities in high-altitude mountaineering have been caused by the death zone, either directly through loss of vital functions, or indirectly by wrong decisions made under stress or physical weakening that lead to accidents,"

Morgan Stanley's chief US equity strategist said that the current valuations have much in common with the "death zone," which is Mount Everest's top where oxygen is extremely low. Basically, it meant that it was in the dangerous territory since the "death zone" is where many climbers lost their life.

Wilson: "This is a perfect analogy for where equity investors find themselves today, and quite frankly, where they've been many times over the past decade,"

Year-to-date, the S&P 500 was around 6%, and Nasdaq Composite was up by 13% during the time of BI's report.

It was also recently reported that the Federal Reserve was unlikely to be able to bring down inflation without increasing interest rates even more, which would cause a recession. This came from Former Fed Governor Frederic Mishkin's research paper.

Some of the top luxury watch brands outperformed stocks and crypto in 2022. While many other markets were massively in the red, the luxury watch market sustained a smaller drop.

See flow at unusualwhales.com/flow.

Other News:

• The Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession, per a research paper
• Top luxury watches outperformed stocks and crypto: Rolex, Patek Philippe, and Audemars Piguet

Resources:

Business Insider