One of Wall Street’s most famous bears, Mike Wilson, is set to step down from his position as chair of Morgan Stanley’s Global Investment Committee. While this news may bring back memories of a previous shakeup that proved untimely for the market, Wilson will continue to hold important roles as the firm’s chief U.S. equity strategist and chief investment officer.
According to an internal memo cited by Bloomberg, Lisa Shalett, CIO of Morgan Stanley’s wealth management business, will take over as chair of the committee. Morgan Stanley declined to comment on the matter.
Wilson gained recognition for accurately predicting the stock market’s downturn in 2022, which led to the S&P 500 experiencing its worst yearly decline since 2008. This successful forecast earned him the prestigious title of top stock strategist in Institutional Investor’s annual survey in October 2022.
However, Wilson’s predictions for 2023 did not fare as well. Despite forecasting that the S&P 500 would end the year at 3,900, a relentless rally in mega-cap tech stocks pushed the index just short of a record high by the end of the year, with the large-cap benchmark closing near 4,800 on December 29th.
While this change in leadership may raise questions among investors and market mavens, it remains to be seen how it will impact Morgan Stanley’s Global Investment Committee and its future predictions.
Wilson’s Departure and Market Repercussions
In a surprising turn of events, Morgan Stanley’s investment committee is facing a major reshuffling as Wilson steps down from his position. Wilson, who had previously admitted to misjudging the market’s future trajectory, attributed much of the market’s decline to the diminishing profits of corporations and the collapse of Silicon Valley Bank earlier this year. Although market bulls couldn’t help but derive some pleasure from this news, others saw similarities between this departure and Charles Clough’s exit from Merrill Lynch in 1999, just as the dot-com bubble approached its peak.
Unlike Clough, however, Wilson is not completely disappearing from the scene. Instead, he plans to reallocate his focus towards satisfying the needs of his key institutional clients. According to Jed Finn, Morgan Stanley’s Chief Operating Officer, Wilson aims to intensify the generation of tactical alpha for these clients.
Despite Wilson’s departure, he still holds steadfast in his S&P 500 forecast for the end of 2024. He predicts a decline of 15.3% from its current position on Friday, at 4,958.61, envisioning a trading level of 4,500 by that time.
See: What 2024 S&P 500 forecasts really say about the stock market