Bullish warning on US stocks! Morgan Stanley Wilson: Two major issues remain unresolved, short-term risk of pullback.

Morgan Stanley stock strategist Michael Wilson said that due to unresolved issues such as trade tensions and a slowdown in profit expectation revisions, there is still uncertainty in the US stock market, so investors should remain cautious in the short term. The S&P 500 index has not fully recovered from the earlier drop this month due to escalating tension between the US and China. Meanwhile, profit expectation revisions (the difference between the number of analyst upgrades and downgrades) are slowing down as earnings season is in full swing. What is causing further unease in the market is the credit crack that occurred due to loan crisis in two regional banks in the US. Strategists wrote in a report: "Until the risks of announcing further recent declines are completely eliminated, it is necessary to see both the US and China effectively ease trade tensions, earnings per share forecasts remain stable, and liquidity becomes more abundant." Wilson stated last week that if the trade dispute between the US and China is not resolved by the end of November deadline, the US stock market may drop by as much as 11%. Although he is cautious in the short term, Wilson said that his view on the gradual recovery of the US economy remains unchanged in the next 6 to 12 months. The strategist has been bullish on the US stock market this year and was one of the few to accurately predict a strong recovery after the sell-off in April due to tariffs. On Monday, US stock index futures rose slightly as President Trump softened his stance on tariffs with China, easing market concerns. Concerns about trade and worries about the broader impact of losses in US regional banks last weekend led to intensified market volatility. The volatility index (VIX) remains near the key level of 20, close to the highest range in the past six months. Data from Deutsche Bank Group shows that overall US stock holdings decreased significantly last week, the largest weekly drop since the sell-off in April due to tariff issues. Meanwhile, Wilson wrote that the momentum of profit revision index is weakening and has already fallen into negative territory, which is something investors need to pay attention to. However, he said that the decline in profit revision is in line with seasonal trends, and may just be a temporary pause before the uptrend. As earnings season officially kicks off, Oppenheimer chief investment strategist John Stoltzfus said that the current results look optimistic. In a report on Monday, Stoltzfus wrote that profits of S&P 500 index component companies that have reported results have grown by 16%, higher than the expected growth of 12%. Stoltzfus states that despite various risks, large US companies have exceeded expectations and provided performance guidance, indicating that "companies still have enough resilience to continue the upward trend in the stock market."