Monday, August 2

S&P500

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Stocks are in a’rolling correction’ despite hitting new highs as the market cycle hits its midpoint, Morgan Stanley says

Angela Weiss/AFP via Getty Images Major US stock indexes are in a "rolling correction" despite notching a series of new highs, as the market cycle transitions to its midpoint, Morgan Stanley analysts said. As investors rotate away from higher risk names and as market breadth declines, major indexes will remain vulnerable, analysts led by equity strategist Michael Wilson said in the note. "Under the surface, financial markets have taken on a much more defensive posture," the note said.So far, Morgan Stanley has taken a less optimistic view of the markets compared to other banks. The analysts said that they fully expect the transition and subsequent corrections to be complete by the end of this year. "It's common for the market to rotate away from early cycle winners toward...