Morgan Says Sell Into Bear Market Rally

I’m not selling, but I think Morgan may be right. Stocks have climbed so much so quickly.

Investors should sell into the recent stock market rally, Morgan Stanley’s strategist said Monday, arguing that it can’t last as corporate earnings deteriorate further.
“We simply do not believe that the market has completely priced in the prospect of further earnings weakness or that it will, without interruption, look through this weakness to recovery,” Morgan Stanley strategist Jason Todd wrote.
On March 18 the S&P 500 rallied 25% to above 800 points since its low of 666 on March 6 – a technical bull market – spurred by positive comments by bank chief executives about improving business conditions as well as a favorable market reaction to the government’s efforts to support the financial system.

That’s right. The S&P 500 bottomed at 666.

Posted by on March 30th, 2009 at 11:49 am

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