Morgan Stanley equity strategist Michael Wilson has stated that the S&P 500 is in the process of carving out a low after hitting the bottom of the firm’s targeted correction range of 6,300 to 6,500. The bank maintains that this is a correction within a new bull market, not the start of a bear market. The forward price-to-earnings ratio has declined 18% from its peak, typically accompanies a recession or an actively tightening Federal Reserve. Wilson argues that this has been contained to less than 10% due to earnings growth moving in the opposite direction from valuations. He also highlighted financial sector sectors such as financial, industrials, and consumer discretionary as potential opportunities. Wilson also highlighted the potential for private credit disruption and AI disruption, which he believes are better understood by markets. The key obstacle to the market is rates, which Wilson identifies as a key factor.