'Double down' on defense because stocks will plunge another 10%, Morgan Stanley's Mike Wilson warns

Stocks will plunge another 10% due to the growth slowdown, Morgan Stanley's Mike Wilson warns (via @CNBCFastMoney)

1/25/2022 5:02:00 AM

Stocks will plunge another 10% due to the growth slowdown, Morgan Stanley's Mike Wilson warns (via CNBCFastMoney)

Morgan Stanley's Mike Wilson, the market's biggest bear, suggests investors are dangerously downplaying a collision between a tightening Fed and slowing growth.

Wilson,the market's biggest bear, expects the painful drop will happen within the next three to four weeks. He anticipates challenging earnings reports and guidance will give investors a wake-up call regarding slowing growth."I need something below 4,000 to get really constructive," said Wilson. "I do think that'll happen."

His strategy: Double down on defensive trades ahead of the predicted setback. He warns virtually every S&P 500 group will see more trouble due to frothiness and is making decisions on a stock by stock basis."We're not making a big bet on cyclicals here like we were a year ago because growth is decelerating. People got a little too excited on these cyclical parts of the market, and we think that's wrong-footed," he said. "There's going to be a payback in demand this year. We do think margins are a potential issue."

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FastMoney And bc of breakdown of FED's printer mc FastMoney Well I’m not seeing any growth slowdown…so I’m calling BS. FastMoney More pain ahead