U.S. retail investors hold shares at record levels

(Bloomberg) – Retail investors continue to pick up the pace of buying cheap stocks in the United States, according to Morgan Stanley strategists, even as stock fundamentals deteriorate.

Much read from Bloomberg

Strategists led by Mike Wilson said in a statement that the optimism of amateur traders is prompting many institutional investors who share Morgan Stanley’s cautious view to follow the trend of not leaving the rally. While supply chain and cost issues for both businesses and consumers appear to be still lingering, it keeps the S&P 500 index even closer to last month’s record.

“This distinction between markets and optimism needs to be resolved in some way in the coming months,” the strategists wrote.

Wilson has repeatedly planned to revise US stocks by 10% to 20% this year as the big economic outlook worsens. Last week he postponed the forecast adjustment for the S&P 500 to a maximum of 10% from the beginning of next year. The previous forecast revision will take place in the fourth quarter.

Morgan Stanley’s rough view is shared by some strategists, such as Bank of America, but others, including JPMorgan Chase and Goldman Sachs, suggest that stagnation concerns are exaggerated and still capture the momentum to buy.

Much read from Bloomberg Business Week

21 2021 Bloomberg LP