Wall Street's most famous5freebingonodepositrequired2022One of the short sellers has just changed its outlook for the U.S. stock market. Well-known short seller Michael Wilson of Morgan Stanley currently expects the S & P 500 to rise 2% by June 2025, after previously believing the index would fall 15% by December.

As the market continued to rise, the strategist's pessimistic expectations for 2023 failed to materialize, and he finally gave in and raised the S & P 500's target point from 4500 to 5400. That took his forecast from one of the lowest on Wall Street to one of the index's new record.

"In the U.S., we expect strong earnings per share growth while moderately compressed P/E ratios," Wilson wrote in a report on Sunday as they discussed the company's second-half view of various assets.

In recent months, Wilson has repeatedly stuck to the S & P 500 target of 4500 points, even as the index hit new highs. He said in March there was no reason to increase the target given the general lack of growth in corporate earnings. He said last month that he would avoid making major predictions about the index's direction given the growing economic uncertainty.

Overall, the bank expects a "clear macro environment" to support risky assets in the second half, although Wilson reiterated that broader economic outcomes are becoming unpredictable as data becomes more volatile.

Wilson raised his forecast for the S & P 500, making JPMorgan's Dubravko Lakos-Bujas one of the few bears on Wall Street. He expects the S & P 500 to fall more than 20% by the end of the year. Deutsche Bank strategists also raised the S & P 500's end-of-2024 target point to 5500 points from 5100 points last Friday.

The Morgan Stanley strategist recommends taking a barbell approach to investing in high-quality cyclical stocks and high-quality growth stocks, and maintaining long exposure to certain defensive stocks, such as consumer necessities and utilities.