Morgan Stanley: Interest Rates Key Risk as Stock Correction Nears End

Morgan Stanley strategist Michael Wilson identifies rising interest rates as the paramount short-term risk for equities, outweighing oil price concerns. He asserts that the S&P 500 correction is nearing its end, evidenced by over half of Russell 3000 stocks in bear market territory and a 17% drop in valuation multiples. The 10-year Treasury yield above 4.5% is a critical threshold for stock pricing. Recent Fed commentary has reduced immediate rate hike expectations, but yield movements persist as a pressure point. Wilson recommends Big Tech and anticipates outperformance in consumer discretionary and financials if oil supply constraints ease.