Michael Wilson, Morgan Stanley's chief US equity strategist, believes that the US stock market rally will broaden, with a rotation into cyclical, economically sensitive industries that have lagged. This outlook is supported by reports of increased traffic through the Strait of Hormuz and evidence that the negative impact of interest rates, oil prices, and the dollar on equities may be easing. These factors could draw cheaper stocks into market leadership, which has been concentrated in high-growth technology stocks.
Wilson maintains a bullish stance on under-owned cyclical sectors such as consumer discretionary, transports, and regional banks. He notes that sentiment and positioning in these sectors remain "bearish and muted" despite their recent outperformance compared to the S&P 500. Hopes for a lasting US-
