Bloomberg Talks
Morgan Stanley's Mike Wilson on Tariffs and Earnings
Apr 15, 2025
Mike Wilson, a strategist at Morgan Stanley, dives deep into the uncertainties surrounding tariffs and their impact on S&P 500 earnings. He revises his earnings-per-share forecasts for 2025 and 2026, expressing concerns about the broader economic challenges, including AI spending and fiscal policies. The conversation also touches on trade policy tensions with China and how these affect not just corporate profits but the overall strength of the U.S. dollar. Wilson remains cautiously optimistic about the potential for market recovery despite ongoing volatility.
07:05
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Quick takeaways
- Mike Wilson from Morgan Stanley has revised the 2025 EPS forecast for S&P 500 firms down to $257 due to tariff uncertainties.
- The cautious stance of foreign investors on U.S. assets signals potential volatility in the dollar and reevaluation of global investment risks.
Deep dives
Impact of Uncertainty on Earnings Projections
The earnings outlook for S&P 500 companies has been revised downward due to various uncertainties affecting the economic landscape. While tariffs have been a significant focus, other factors, such as pressures on AI capital expenditures and fiscal spending constraints, are contributing to the overall economic health concerns in the U.S. The lack of clarity surrounding these issues raises questions about potential recession risks and the resulting impact on corporate actions, including possible layoffs. The conversation surrounding the extension of tax cuts adds another layer of complexity, as failure to secure these could further hinder earnings in the coming years.
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