The stock market still hasn't priced in the positive impact from interest-rate cuts, says Morgan Stanley's Mike Wilson

Morgan Stanley's Mike Wilson believes the stock market has yet to reflect the positive effects of anticipated Fed interest-rate cuts. He advises investors to buy dips, noting that stocks typically perform well during rate-cutting cycles. Wilson highlights a strong correlation between stock returns and inflation breakevens, suggesting a favorable environment for equities. However, he warns of risks, including potential weak economic indicators that could affect rate cut expectations. Wilson remains optimistic about U.S. stocks, particularly small-cap stocks, as the market adjusts to these changes.