Morgan Stanley strategists say the US equity rally should broaden beyond tech
giants as this earnings season delivers strong results across other stocks. The
team led by Michael Wilson says the median S&P Composite 1500 constituent
currently has EPS growth above 10%, the strongest reading since the
post-pandemic recovery. Analysts are raising profit forecasts for consumer
discretionary and transportation, both closely tied to economic growth. "We
expect market breadth to continue widening as median-stock earnings resilience
drives the rally." Q2 earnings season begins Tuesday with large banks reporting
first. Compiled data show analysts expect S&P 500 company profits to rise about
23% YoY, one of the strongest stretches outside recoveries after major
recessions.
