Correction Worse Than February Is Looming, Morgan Stanley Says
- Cyclical stocks fall behind despite strong earnings support
- Tech-stock pain is just the start of more losses, bank says
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The market’s leaders have gone missing this earnings season. For Morgan Stanley, that’s a worrying sign that the stock rally may have exhausted itself.
Despite more than 85 percent of S&P 500 members beating analyst estimates, the type of pro-cyclical companies you’d expect to surge amid banner earnings have been falling behind. Not even the biggest winners of the year are posting reliable gains, as earnings misses from the likes of Netflix Inc. and Facebook Inc. hamper the momentum trade.