S&P 500 Index: Three signs the bear market is not over – Morgan Stanley

Equity investors appear optimistic, but US government bonds, Gold and Oil tell a less encouraging story,  Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley, reports.

Equity gains are merely another bear market bounce

“Recent equity gains are merely another bear market bounce – not the beginning of a sustainable bull market. The current rally seems to be based not on improving economic fundamentals but on easing financial conditions, which we believe are likely to reverse later this year.”

“Even as stocks trade higher, recent market action for other asset classes paints a starkly different picture. US government bonds: Treasury yield curves remain deeply inverted, a time-tested signal that an economic downturn is on the horizon. Gold: Since the October low for the S&P 500, Gold continues to outperform both the S&P 500 and the Nasdaq. Oil: If equity investors are expecting a ‘soft landing’ and potential rebound in economic growth later in 2023, oil prices do not reflect that.”