Accurately predicting after the July decline, well-known Wall Street short sellers: There are almost no signs of the US stock market entering a bear market

Accurately predicting the decline of the US stock market in July this year, Mike Wilson, the chief US stock strategist at the well-known Wall Street bear Morgan Stanley, recently spoke out. Compared to his views in recent years, his bearish view on the US stock market this time seems less aggressive.

Wilson stated that unfavorable seasonal factors and uncertain economic growth prospects may limit the upside potential of the US stock market for the remaining time of this quarter, but the possibility of a comprehensive collapse of the US stock market is very low. After the sell-off last week, traders are still in a tense state, so a major crash in the US stock market is unlikely.

Wilson said that adopting defensive strategies makes a lot of sense. He believes that the US stock market will experience range-bound volatility in the case of slowing growth and consumers facing difficulties.

"I find it hard to believe that we will break through the highs again. I also don't think we will completely collapse to the point of entering a new bear market."

Wilson still believes that there is not much upside potential for the S&P 500 Index, and he expects the benchmark index to fluctuate between 5000 and 5400 points. The lower end of this forecast range is about 8% lower than the closing level on Tuesday, and the higher end is slightly lower by 0.6%.

Since the beginning of this year, the S&P has risen by more than 10%. Wilson pointed out that with the significant rise of the S&P this year, challenges for further upside include slowing US economic growth, overly optimistic market profit expectations, and the Federal Reserve's "reluctance" to proactively cut interest rates. The opportunity lies in individual stocks, not in the broad stock indices.

In contrast to market consensus, Wilson strongly recommends buying so-called defensive stocks, while most investors are still following the momentum trading of technology stocks. Wilson said he finds it hard to get excited about stock indices, which is why he is very focused on stocks and sectors when trying to profit.

On July 9th this year, Wilson warned that the S&P was "highly likely" to experience a 10% pullback. A week later on July 16th, the S&P hit a historic high, followed by an overall decline, culminating in the "Black Monday" on August 5th, with a cumulative drop of about 8.5%. Since last Monday, the S&P has risen by about 4.8% as of this Tuesday, but the US July CPI to be released on Wednesday will be a major test for the US stock market recently.