Strategists led by Michael Wilson pointed to improving traffic through the Strait of Hormuz and easing pressure from rates, oil and the dollar after sectors lagged during the Iran war.
Morgan Stanley strategists led by Michael Wilson said U.S. equities may get another leg higher if investors rotate into cyclical, economically sensitive sectors that underperformed during the Iran war. They pointed to reports of increased traffic through the Strait of Hormuz and to signs that interest rates, oil prices and the dollar could become less of a headwind for stocks. The S&P 500 is about 2% below its record high, leaving room for further gains if lagging sectors begin to catch up.