Bloomberg Talks Morgan Stanley’s Mike Wilson Talks Rolling Recovery
Jul 29, 2025
Mike Wilson, Chief Investment Officer at Morgan Stanley, shares his insights on the market's trajectory. He discusses the transition from a rolling recession to a rolling recovery, highlighting optimistic economic indicators. Wilson emphasizes the revival of U.S. exceptionalism and its role in driving growth. He also delves into the significance of small banks in supporting local economies and the importance of diversified market participation for future stability.
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Rolling Recovery Signals Bullish Markets
- Morgan Stanley sees a "rolling recovery" in the economy following a soft recession period lasting about three years.
- Earnings revision breadth has exploded higher, driven by a weaker dollar and operating leverage across companies, signaling bullish market performance.
Tech Leads Broadening Recovery
- The current economic recovery is led by tech and the MAG-7 but is starting to broaden to other sectors like industrials and financials.
- This gradual broadening indicates the early stages of a more sustained and widespread market recovery.
Tax Cuts Boost Company Earnings
- U.S. companies benefit significantly from corporate tax cuts, increasing cash earnings by 5 to 10%.
- This reinvestment potential supports a positive outlook on market performance and economic growth.