Morgan Stanley: Current U.S. Stock Sell-off is a Healthy Correction, Maintains S&P 500 8000-Point Target

Odaily News Morgan Stanley strategists stated that Friday's U.S. stock sell-off, triggered by position adjustments, was a healthy correction. A team led by Mike Wilson pointed out in a research report that the decline was led by the semiconductor and storage sectors, which have seen significant gains year-to-date. At the same time, concentrated holdings by hedge funds and leveraged ETFs have allowed risks to accumulate continuously. The team believes that if the current bull market continues through the end of the year, a market adjustment is inevitable and is ultimately positive in the long run. The strategists maintain their baseline target of 8,000 points for the S&P 500 index, representing roughly 8% upside from current levels. They expect corporate earnings to continue strengthening, the breadth of growth to expand further, and macroeconomic data to continue providing support for the market.