Stocks rallied broadly in July and the Nasdaq bounced back from earlier declines. And Wall Street is debating whether markets have bottomed yet. Growth stocks such as technology have fallen sharply this year due to monetary tightening, the recession and other risks. And Morgan Stanley on August 3. warned in the report that although Nasdaq from June 16 bounced 16%, investors shouldn’t be getting ahead of themselves. “This is not a market bottom, things will not change consistently as we will be buying less tech products for a while, so everyone will have fewer units because post-Covid = pre-Covid demand,” the bank’s analysts wrote. “Reality check – unlike ‘big tech’, consumer-facing companies are more cautious in their guidance,” they added. Morgan Stanley listed several examples: Sony disappointed with guidance, Microsoft and Apple slowing hiring. Microsoft also said small and medium-sized businesses are spending less on IT and warned of a weakening PC market in June, the investment bank noted. Morgan Stanley said the “outlier” is Apple. According to Morgan Stanley, consumption in China also fell due to the effects of the Covid lockdown. This sluggishness will affect the e-commerce and consumer discretionary sectors, it said. Why stocks may jump The bank said stocks are now rallying for a number of reasons, with inflation expectations falling on falling commodity prices and an implied slowdown in interest rate rises meaning less pressure on tech stocks. Earnings were “extraordinary but not as bad as feared,” she added. The rally in US stocks has largely continued this week. The Nasdaq is up 2.7% so far, while the S&P 500 hit its highest level since June on Wednesday before gaining 0.5% for the week. But Morgan Stanley was cautious about what the future holds. Read more Wealth manager predicts next bull market – and reveals how to position for it Here’s how to invest to outperform a poor year in stocks and bonds – according to the pros Has the market bottomed out? Here’s what Wall Street has to say after the US stock market rebounded in July. “Profits won’t go up – the problem isn’t with the current earnings season (it’s hindsight), but we’re on the wrong side of the earnings cycle.” and it’s another earnings season and another where we’re going to see write-offs, top line pressure and average margin change,” the analysts said. Tech pickers Morgan Stanley said Samsung was one of the tech stocks that could weather the “storm.” It said the company has a “vast range of resources” that it has not yet valued, and its valuation has fallen to its “most important” level since 2018. the end Morgan Stanley offered 70,000 Korean won ($53) for the stock, about 14%. The bank said it likes companies that have the ability to consistently grow better than their peers, citing chipmakers TSMC and Alchip as two such examples. Morgan Stanley set a price target on TSMC of NT$780, up about 55%. It also gave Alchip a price target of NT$1,420, up more than 120%. Morgan Stanley said it would sell technology parts such as cloud semiconductors and Japanese semiconductor equipment.