Stocks haven’t hit bottom yet, says the analyst who called a ‘rolling recession’ when everyone else saw a boom

Stocks haven’t hit bottom yet, says the analyst who called a ‘rolling recession’ when everyone else saw a boom
Morgan Stanley’s Mike Wilson spent years insisting a “rolling recession” was hiding in plain sight while Wall Street celebrated what appeared to be a boom. Now he’s back with another contrarian call: half the stock market is already in a bear market, the correction has been grinding for six months, and investors panicking this week arrived late.
In a note published Monday, Wilson — Morgan Stanley’s chief U.S. equity strategist — argued that the dramatic volatility roiling markets recently is not the beginning of a selloff. It’s closer to the end. “This correction is mature in time and price,” he wrote, anchoring the call with a striking data point: 50% of all stocks in the Russell 3000 are now down at least 20% from their 52-week highs, and among S&P 500 members, the figure exceeds 40%.
The backdrop is important. Wilson spent years arguing, often in isolation, that the economy was much weaker for many companies and consumers than what the headline economic statistics (nominal GDP or employment) suggested. Rather than a single crash, he said, weakness had moved sector by sector — tech first, then consumer goods, then the broader economy — meaning the usual markers of recession, soaring unemployment and plummeting GDP, remained muted while pain mounted underneath. He called it a “rolling recession.” Most of Wall Street thought he was wrong.
He wasn’t. Wilson identified April 2025 — when the White House’s Liberation Day tariff announcement triggered a market capitulation — as the recession’s trough. Earnings revisions breadth staged a dramatic V-shaped rebound from that point, payroll revisions improved, and layoff data peaked and rolled over. The early-cycle recovery he had forecast was underway. And critically, it’s that recovered, reaccelerating backdrop that shapes Wilson’s read on the current turbulence.
This week’s sell-off, he argued, has been a “correction within a bull market” — not a new downturn. It began last fall, when liquidity tightened, well before crude oil prices spiked and the VIX lurched higher in recent weeks following the escalation of the conflict in Iran. The geopolitical shock served as a “final blow” — the kind of capitulatory event that typically marks an ending rather than a beginning.
The numbers back him up on the damage already done. Software and services stocks have been the hardest hit, with 97% of S&P 500 members in that sector trading at least 10% below their 52-week highs. Semiconductors, consumer discretionary, and financial services stocks tell a similar story. The index-level S&P 500 decline of roughly 15% from peak is real — but it dramatically understates how widely the carnage has spread beneath the surface.