With the Power Gauge, He Could've Avoided a 'Mea Culpa'

Many investors are scratching their heads after a recent move from Morgan Stanley (MS)... You see, the investment bank's head equity strategist Mike Wilson and his team maintained a "bearish" market outlook until late July. [Chaikin PowerFeed]( With the Power Gauge, He Could've Avoided a 'Mea Culpa' By Pete Carmasino, chief market strategist, Chaikin Analytics Many investors are scratching their heads after a recent move from Morgan Stanley (MS)... You see, the investment bank's head equity strategist Mike Wilson and his team maintained a "bearish" market outlook until late July. And of course, it was tough to take that stance... As regular Chaikin PowerFeed readers know, stocks have ripped higher this year. [Even after this month's pullback]( the benchmark S&P 500 Index is still up roughly 15% in 2023. And the tech-heavy Nasdaq Composite Index has soared around 31%. Those gains are significant. And yet, Wilson and his team stayed "bearish" as stocks soared. Now, they're begrudgingly admitting defeat. That's what Wilson and his team did in a July 24 research report. Specifically, they said... However, the upside move in equity multiples... has gone further and persisted longer than we anticipated – i.e., we were wrong. In other words, a powerful Wall Street institution issued a "mea culpa" of sorts. You've probably heard that phrase before. It's Latin for "my fault" or "my mistake." Frankly, Wilson's report is far too complicated for regular investors to decipher. Heck, it's probably even too dense for most professionals. But as I worked through the report, something caught my eye... The report included a section called "What to Own" with a list of ticker symbols. So I decided to put the Power Gauge to the test. I wanted to see how our one-of-a-kind system rated all the stocks in Morgan Stanley's list. Here's what I found... Recommended Links: [Must-See: New Bank Crisis Update]( His system warned to sell Silicon Valley Bank, First Republic, Silvergate, and Signature Bank as much as a year BEFORE the first wave of bank failures hit in March. And last November, he correctly predicted we'd witness a "RUN on the banks in 2023." Now, Marc Chaikin is back with an important five-minute update to explain exactly what he thinks is coming next for U.S. banks and the overall market. [Click here for Marc's new update](. ["Federal Bitcoin" is coming to a bank near you, starting NOW]( Last month, the U.S. government took the first step toward creating its own cryptocurrency... a "federal bitcoin." The U.S. Treasury and 120 banks have already signed up for it. If you get positioned before the wider rollout, you could make 3,050%. [Click here to learn more](. In short, using the Power Gauge, I ran what we call a "health check" on Morgan Stanley's list of stocks. And frankly, the results were rough... Only 27 out of 79 stocks on Morgan Stanley's list earn a "bullish" or better rating from the Power Gauge today. That's just 34%. Take a look... [Chaikin PowerFeed] What's more, Morgan Stanley doesn't even seem to have learned its lesson... Yes, Wilson and his team issued a mea culpa. But they're still playing the wrong game. More than half of the 14 "bearish" or worse stocks are in defensive ([or "risk off"]( industries. With the longer-term uptrend intact, it's smarter to keep playing offense today. Look, I didn't write this essay to throw Wilson under the proverbial bus. Heck, everyone in this industry will get things wrong from time to time. No one is perfect in the markets. But here's my overall point... Wilson and Morgan Stanley are still looking at areas of the markets that the Power Gauge sees as unfavorable. They admitted their mistake, but they didn't learn from it... They recommend being overweight defensive sectors like consumer staples and utilities. But the Power Gauge shows that the consumer staples sector has had weak relative strength since mid-January. And the utilities sector has been "bearish" for most of the year. At the same time, Wilson and his team recommend being underweight "risk on" sectors like consumer discretionary and technology. To be fair, they still recommend having exposure. Yet they've chosen to mostly avoid the sectors that have absolutely soared this year. Folks, in times like today, I'm thankful to have the Power Gauge on my side. I'm sure Wilson is a smart guy. And the other analysts at Morgan Stanley are smart folks as well. But for one reason or another, they're choosing to go against all the market data. Even a quick glance at the Power Gauge could've helped them avoid the mea culpa. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.52% 13 13 4 S&P 500 +1.08% 140 260 99 Nasdaq +1.58% 50 39 10 Small Caps +1.04% 483 974 477 Bonds +2.48% Information Technology +1.80% 42 22 1 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Information Technology +2.80% Communication +0.57% Energy +0.52% Real Estate +0.41% Utilities +0.35% Discretionary +0.15% Industrials +0.01% Materials -0.12% Financial -0.64% Health Care -0.71% Staples -1.17% * * * * Industry Focus Dow Jones REIT Services 1 48 61 Over the past 6 months, the Dow Jones REIT subsector (RWR) has underperformed the S&P 500 by -15.76%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #21 of 21 subsectors. Indicative Stocks [rating] JBGS JBG SMITH Properties [rating] GNL Global Net Lease, In [rating] HIW Highwoods Properties * * * * Top Movers Gainers [rating] VFC +3.90% [rating] MRK +3.80% [rating] CCL +3.77% [rating] MPWR +3.76% [rating] BBWI +3.75% Losers [rating] PODD -4.66% [rating] EQT -3.80% [rating] CF -3.06% [rating] NKE -2.67% [rating] DXCM -2.43% * * * * Earnings Report Reporting Today Rating Before Open After Close ADSK, INTU DLTR ULTA No earnings reporting today. Earnings Surprises [rating] SPLK Splunk Inc. Q2 $0.18 Beat by $0.30 [rating] SNOW Snowflake Inc. Q2 $0.15 Beat by $0.10 [rating] NVDA NVIDIA Corporation Q2 $1.09 Beat by $0.17 [rating] NTAP NetApp, Inc. Q1 $1.54 Beat by $0.20 [rating] ADI Analog Devices, Inc. Q3 $2.49 Missed by $-0.03 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. 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