Despite the fact that some markets are having an increasingly hard time ending the day without a triple-digit loss, and that all major markets are ending their days in the red lately, no one has really been panicking out there.
It's been so long since we've had a real crisis that most of the big financial institutions seem to be looking around and wondering "What me worry?" while white knuckling through another afternoon on the DJIA. But today, we finally got a canary in the panic coalmine. Thanks to those messy drama bitches over at Morgan Stanley, the fear of a Bear Market is officially upon us!!!
Morgan Stanley disagrees with the rest of Wall Street: The bank's top strategists are gearing up for a much longer bear market while others are betting the sell-off is short-lived.
"The rolling bear market continues to make progress and there is growing evidence that it is morphing into a proper cyclical bear market in the context of a secular bull," wrote Michael Wilson, the bank's chief equity strategist. "We think the evidence is building and the message from Mr. Market is clear: the consensus outlook for earnings growth is too rosy next year.
"Cyclical bear market"? Why not yell "Fire!" in a crowded theater? Or yell "Bill Ackman!" at an orgy hosted by Brad Pitt. You're RUINING THE FUN, Morgan Stanley.
And guess who Gorman's minions are blaming for all the blood on the street...
"The markets seem to agree and have been quietly revolting all year," Wilson added. "We don't think the revolts will stop until central banks pause or at least signal they are concerned. With the Fed having to respond to still strong economic data and the desire to remain apolitical, we think it could take another 200 S&P points making 2450 a reasonable downside target to consider."
Morgan Stanley might be alone on this call for a while. After all, with DJ D-Sol newly installed behind the ones-and-twos in the corner suite, Goldman Sachs is too full of optimism and designer party drugs to feel bearish. BofA is not big on forefront thinking, Citi doesn't really have opinions anymore, the European banks have already been in a bear market emotionally for a while now, and Wells Fargo...is Wells Fargo. Then there's JPMorgan, which will be loathe to make any bold macro calls before the midterm and risk upending President-Elect Dimon's campaign rollout plan.
So there you are, Morgan Stanley, at the forefront of pessimism in the most illogically optimistic moment of American history. We like this look on you.