joining us now the mike wilson, chief u.s. and chief investment officer at morgan stanley good to have you on. i've got a chart here from tom lee. it's a technical chart and shows the 50-day moving average. i know you're not a technician per se, but it shows that every time we drop down a little bit, we hit that 50-day moving average and the s&p just continues to move hirgher only one time has it broke below that in the past year. obviously it did 18 months ago but it's been a very strong chart. what are you seeing now, fundamentally, technically, fund flows, whatever, that makes you think we may finally get a real correction >> yeah, thanks, brian look, i think, that's a good point. that's what's kept people involved here. the s&p 500 has been tremendous. it's been the place to be. and look, that's been really part of our call this year, which is that in march, you know, mid cycle transition, we said quality would outperform. that's when we got away from the cyclical trade and small caps and low quality areas. there's no bett

in different directions dow in the green for fourth straight day joining us now on the phone is mike wilsonou. >> thank you thank you for having me. >> looking through the recrept note that the bottom line is that for the major averages at least the headline level you think the outlook is pretty bleak. >> yeah. i wouldn't say it's bleak but not that exciting. it is fully valued the revisions probably going to be less exciting, as well. and of course the fed now is moving towards tapering but not a great come by nation for the major averages and really i mean the s&p 500 which has been far and away the best performing major average in the world and as you know our narrative for this year is all very normal right? at the end basically the highest quality index is the one that underperforms and seeing that in the last couple of days nicely under underperforming. the dow did better >> gauge for us what we talk about here sideways move for the s&p the rest of the year or see one of those elusive 10% pullbacks? >> we are still very much -- target for year end is 4,000 and assume a 10% pullback be

one member is buying today at least one we'll also be joined in a few minutes by morgan stanley's mike wilson who just revised his call on the market and you need to hear that. stephanie link, josh lebenthal and the stocks got a nice bump off the open at 11:00 it was all gone it's coming back a little. the dow is up 141. the s&p is good about 17 and a third or so of a percent and the nasdaq with a nice bounce of two-thirds of 1% and russell is good for 7.5 points. the tech has been volatile josh, the central question, buyable dip or is this the start of that correction that we've been thinking might be coming? what do you think because i look at you as a seller today and i see you selling a stock that you loved, that you made the case for multiple times on this show, that you had bought back in april at the end and that is leslie's it's a pool supplier it's been down in the last three months and you're a seller can you tell us why and what that says if anything, about your big market view >> no. it has nothing to do with my big-market view. leslie's did something disgusting shortly after i st

jonathan: mike wilson of morgan stanley, chief u.s. equity strategist.orward to that conversation in 60 minutes. looking forward to the conversation. from new york, this is bloomberg on radio, on tv. this is bloomberg surveillance. ♪ ritika: the fate of president biden's economic agenda is largely in the hands of house speaker nancy pelosi. just to find a way to keep the democrats moving toward her goal. she has an agenda that includes the president's multitrillion dollar tax and spending bill. she will have to find a way to avert a government shutdown and treasury default. british prime minister boris johnson is heading to the u.s., his first trip out of europe since the pandemic began. his most radical relationship with president biden is that a delicate juncture. it has reinforced the idea of a special bond ahead of an upcoming global climate summit the u.k. will host. the u.n. general assembly returns to manhattan this week. many new yorkers are less than enthusiastic. hotel and restaurant associations are expecting only a moderate economic impact. i

mike wilson, morgan stanley's chief u.s. equity strategist.ing up, investors ignore electronic arts' small issue in terms of the games released pre-christmas. we got a four-week delay on the next big gain. the market was freaked out by that. this is bloomberg. ♪ >> it is time for the bloomberg business flash. a version of its debut sedan has been confirmed as a longest range electric vehicle ever. the company says the agency i wanted a rating of 520 miles of range, more than the tesla model x. lucid plans to build less than 500 cars with those specifications. the push for a $15 minimum wage may have stalled in congress but the type labor market is making $15 that the factor minimum these days. many service sector industries crossed above the $15 starting wage threshold. employers such as target and walmart have increased their starting pay to $15 or more. guy: thank you. let's talk about what ea is up to, electronic arts delaying its next big game until november. it could have been worse. it is called battlefield 2042. at least we don't have t

mike wilson you're talking about. >> i'm talking about mike wilson who is a pretty bright guy and makes you think but where i come at it, you want to be invested you want to have some cash because what's going to happen between now and the next fed meeting is basically nothing there are really no positive catalysts that i see there are only negative catalysts. >> no covid trends finally going in the right direction. tom leis said there's too much pessimism in the marketplace >> but he's been saying that for six months, that covid cases going in the right direction the market is not really taking into account covid cases the market comes to the conclusion it just doesn't matter a lot of offices away from the top line that we've seen from facebook and google, a lot of offices are going back full. goldman is back at 100%. and most businesses are going back so i think you are seeing that i don't believe the market is negatively disposed to increasing delta variants or the mu variant which is not a factor now. what the market is looking at, my belief are tax increases, number one, but more s

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you get to 20%, as mike wilson of morgan stanley is talking about, what do you do at that point?t is probably too late -- we have already had the correction at that point -- but what do you say to yourself on a daily basis to make yourself think, i could be wrong here? cate: a mistake investors make is that you cannot look at the price. look at the fundamentals. if the fundamentals are strong, you have to ride it through. there are a lot of zombie corporations out there. if you look at the junk bond market, the debt market, a lot of weak companies are being held up by very low rates. those are the things i am looking at. look at the tech sector. technology is doing well, cybersecurity, we are seeing demand heard a lot of malware out there -- demand. a lot of malware out there. i'm not looking at price. as long as the companies i hold are strong, that is what i will be looking at, and that is a mistake investors make, because after a 20% move, he will panic and sell at the bottom. guy: ok. on that note, we will leave it, cate faddis of grace capital. thank you. let's talk about th

we were talking to mike wilson yesterday of morgan stanley.iew is when it becomes real, the market will go from zero to 100 super quick. is that your perspective? >> yes. this is something we have seen in the past. until it is known, it is hard to reposition your portfolio on the basis of something that could happen. one of the baskets we track is we look at those tax beneficiaries. this is more on the corporate taxation side. we look at those companies that had a big benefit several years ago and those that would stand to have a risk looking forward. when you look at that basket, it has not moved at all. that is something. it could create volatility going into year-round based on what you are discussing. is it retroactive, is it not? that could have individual investors making decisions. alix: it would be easy to say it would be a simple as go ahead and sell the tax winners from trump's tax plan and buy the ones that are going to be reversed. are there any that are specifically on the docket or chopping block when it comes to this tax plan th

rally but it could have an impact on relative sector performance and i think we agree with that mike wilson, by the way, says you want to stay defensive, this may be the time he says when markets are playing tricks on investors and even setting a bit of a trap. he's talking about why stocks rallied last week in the face of his own call for a 20% correction in stocks i mean i'll give him credit for holding his guns, keeping to his position there you want to take a position on either one of those suing begs either from ubs that yields won't end the equity rally or mike wilson who says we're basically getting a fake out >> one i think we can't forget we've been in this period of time where economic growth has been negatively impacted by the delta variant. it's beginning to lessen that should absolutely be a good thing. and could, better economic growth could support stocks as we head into the second half of the year and i also think with regard to interest rates, you know we saw the shift back into tech no surprise. i think we got a little bit of a growth scare that's the safety training but i

we're seeing a pretty nice reflection of that now in this big lift to the upside >> josh, we had mike wilson earlier this week, and i referenced a few moments ago about these nuanced calls and the calls for the 20% correction and we've made the case all throughout the last many weeks that the only way that you were going to get the mike wilson correction is if the leadership of the faang and the mega-cap technology stocks suddenly gives itself up and rolls over while at the same time the cyclical or so-called epicenter stocks continue to underperform those larger cap, larger growth technology names you could have a period of underperformance if this is the beginning of that in big tech where you don't have the big correction because of what we said at the very top and that is a pickup in sectors that are directly tied to a robust and rebuilding and re-emerging economy once you get past the delta variant. that's the thing that saves the correction. >> yeah. i think if people want to remember back to last may, we had this explosion in the quote, unquote, value stocks and a lot of them are cycl

nothing like the 20% that mike wilson is talking about. tom: on monday, we are kurtosis free. lisa: are we going to see 4% to 5%? the idea of the expectation for a shallow drawdown. what is the tipping point? when do you take a step back? >> all of the things that we worry about, whether an external factor like china or delta, there are so many things on our list. if you look at q2 earnings, not only were they strong, but profits were high. the chief vulnerability is a decline in earnings that people cannot look past. another thing that is really up there is the fed and this idea that as it enters into a less generous cycle, it becomes part of the problem, potentially. if we look at the last couple of risk off, it has always been there. they have taken on a new stance and it seems to be a trickier time for them. lisa: all of these are the sort of situation that people have been expecting for so long. at a certain point, isn't it likely to go higher versus the expectation? >> markets can get stretched one way or another, beyond what you think that the fundamentals can dictate.

mike wilson of morgan stanley, "price is the most import determinant of people's behavior. price gets you to focus on the things right in front of you all along. it is priced its changed, and price since the narrative." tom: at the other side, the bulls look at technology. what was was an opportunity yesterday, but you've got to pull a trigger given the fear. i failed. i couldn't pull the trigger. tom: you couldn't get out of jonathan: -- jonathan: jonathan: jonathan: you couldn't get out of cash. let's see what jason draw hope -- jason draho has to say, ubs head of america's asset allocation. how long this will take? jason: it might be along the line of four to six weeks. we have to get through the evergrande situation. we have to get through the fomc tomorrow to see is the fed going to be a little more hawkish, or do they toe the line. we get to the debt ceiling. over the next two weeks, we see a lot of potential headline risks to get through. until we come clear of those hurdles, i think people get more comfortable that the underlying fundamentals haven't really changed.

tom: for those of you who follow us on more than an hourly basis, from been labor over to mike wilsonr at morgan stanley. there is a debate out to the end of the year. jonathan: we are trying to work out the what next after the midcycle transition. lisa:lisa: there is thinking that with the big tech companies, there are few employees relative to the cash flow. that point is going to be more and more salient as we start to see these, because they will be more immune to that pressure. they have better deals with the tips of players, for example, and the automakers. -- chip suppliers, for example, and the automakers. jonathan: morgan stanley put up sellers again for the analyst classed. we need the associate class to flex their muscles, if you are middle-management at the bank right now, you are doing all the work. lisa: and, frankly, the carry through, the bleeds through, the minimum wage increase is dramatic, because you're right, all of the people and the others of the chain say hey, what about us? jonathan: looking down at the analyst chain saying, you don't want to do the work, so s

is that the right way to look at it that you cannot have these pullback calls, whether it is mike wilson's or whoever, come true if the faangs continue to hold up like joe says they are >> yeah, that is true. and joe is right 3 we won't see that significant pullback it has been 212 days today since we've had a 5% pullback. in other words, way out in october of last year that is a long time certainly. and what are the reasons well, we're throwing a ton of money at the markets it is doubtful we'll get 3.5 trillion more. i think that we'll get something but i don't know that it will be over 2 trillion given joe manchin and kyrsten sinema are basically making noise about this being way too much money and maybe taking a go slow approach which is not what their colleagues want to hear. and then you've got the ecb which meets tomorrow in germany basically sounding as if they are done with this flee money p free money and the european central bank will have to address that so a lot of things pushing right here in the short term i don't know that any of those are big enough to derail us. again, in

one member is buying today at least one we'll also be joined in a few minutes by morgan stanley's mike wilsonmarket and you need to hear that. stephanie link, josh lebenthal and the stocks got a nice bump off the open at 11:00 it was all gone it's coming back a little. the dow is up 141. the s&p is good about 17 and a third or so of a percent and t

but you can look -- abwe've said it almost every day -- you're not going to get the correction of mike wilson, for example of 10% and others who are calling for a correction unless you get a breakdown in the biggest tech stocks, the ones that jason snipe and kari and everybody owns the question is, joe, are those starting to break? facebook lowest level in two weeks. apple, trading down again following its event. now, i know you continue to get positive calls related to the microsofts, the facebooks, amazons, alphabets and the apples you can't have those stocks break down, joe. >> no. no be, you -- and yesterday you made an excellent observation surrounding the apple event. you observed it was probably more of a market event than an apple event. that's what it was in the afternoon we were all basically pricing and trading apple, apple declined, the mechanic declined. but the big five, they need to continue to have the resiliency that they have represented for the better part here of 2021 if the market is going to continue on an appreciative path, which i suspect it is going to do. i don't thi

because a correction is coming that is the big warning tonight from morgan stanley's mike wilson he'llback plus, hold them or hold them just a day after we talked about them, casino stock

. >> crypto, ether all getting hurt this morning we didn't get morgan stanley's mike wilson, who hast correction he thinking a correction of 20%-plus is increasingly likely. he divides these paths into two parts, one he calls fire, the fed reacting to an overheating economic, and ice, where you get margin trouble and supply issue, and demand pull forward. he thinking the second part is increasingly troublesome. >> fire and ice, thunder and ligh lightning. a good couple running backs. i've been saying sell sell sell, but i'm not buying that negativity mike should have stuck something that's more negative, but not that much. we do have companies that are doing quite well we do have a bond market, david, that says you can't own bonds. we do have companies with unbelievable balance sheets, and they're going to report. i'm not buying the end of the world scenario i'm not. >> i know you're not, and at the begivening of this month you did warn about volatility. >> if you have 20 years where this is the bad period, am i going to wake up and say, that's not true this time it's going to be dif

when you look at positioning and the narrative, if you look at last monday, mike wilson said monday wash and analysts said the same thing. i disagree in the near-term. when you look at what we are going to in the fourth quarter, the third quarter, on the delta variant, the rate of change on covid cases in the us and europe and china and around the globe are down huge. this fourth quarter is going to be the last big reflation trade we will see before you take the risk off so we think october or november could look like january. inflation will be the head wind that crushes us next year in my opinion but it will be because of a fed policy mistake, not because of what is going on in dc. stuart: would you buy big tech? >> the bond market is panicking about the 10 year going up. we are telling clients to see this in the fourth quarter. you've got to take advantage of these opportunities. stuart: october could be like january. october we go straight up. >> when you look at the cyclicals and energy, in january and february, they are going to be the leaders in october and november. to prepare fo

. >> mike wilson mentioned that fire and ice thesis last time he was on, but he definitely got a littleore -- i guess that's the ice side of things. got a little more bearish in the last week or two we should have him back on kathy, thank you gunja, thank you for playing along. >>> when we return, an update on the criminal fraud trial against elizabeth holmes we're going to talk to a producer who's been inside the courtroom each day and has now obtained hundreds of pages of private text messages central to the case you have to hear about it coming up right after this. >>> the wall street journal reporting that chinese authorities have asked local governments to prepare for the eventual downfall of evergrande. an update from beijing in the next hour. we see access to fresh food being the global norm, not the exception. at emerson, our cold chain software and technology keep perishable food at proper temperatures, to assure its safety and quality. emerson. consider it solved. >>> welcome back to "squawk box. former ceo elizabeth homes is on trial defending herself against counts of wire f

so a day later, tulsa homicide investigator mike huff paid a visit to michael wilson, a well-known memberoticed a maroon sedan parked in wilson's driveway. it matched the description of the drive-by car. >> mike huff says, hey, i want to talk to you about this shooting. what do you know? and michael is trying to hide a gun. huff sees the gun and takes the gun. ballistic tests showed that that was the gun that, you know, was used to kill karen summers. >> it seemed damning, but wilson told detectives he was hiding the gun for malcolm's friend, de'marchoe, and had given de'marchoe the bullets. wilson was arrested for holding the gun, but his story lined up with what police were hearing from two eyewitnesses -- malcolm and de'marchoe killed karen summers. these witnesses said that they saw malcolm and de'marchoe there. they saw the shooting. they identified them. >> suddenly malcolm was in almost the same situation his brother had been in three years before and telling a tulsa homicide detective exactly the same thing -- i'm innocent. >> i'm like, whoever is telling you this, they're obvious

mike garcia a great friend of the reagan library, congressman? california governor in the history of the state of california wilson former first lady of california governor gayle wilson. [applause] bryant from california state assembly woman said that office, brian. >> ventura county supervisor bob uber members of his team, bob. [applause] connie and gavin and joanne because a bird, two of the cochairs of the ansa nancy reagan centennial committee. author karen and her husband paul richter. chad fagan our sculpture is to unveiled the marquette of mrs. reagan earlier today. [applause] doctor should net that weatherspoon and rebecca naegele in their wonderful foster grandparents. [cheering] [applause] hometown favorite. lisa ceo of the boys and girls club of pasadena. [applause] eunice davis whose husband hal david was a dear friend to nancy reagan. [applause] of course the hard-working and dedicated volunteers of the reagan library who makes your visit in our work so rich and memorable. and finally of course our reagan library visitors to whom we are so grateful to see after such a long journey back to normal. [applause] thank you all for joining

the mayor dies mysteriously in chapter one, and, mike, you know i bring back in this book one of my favorite characters that bob ever came up with, wilsonraced that role and i can just tell you, to be asked to do sunny randall and jessie stone has been one of the greatest privileges i've ever gotten as a writer. >> i don't blame you. >> all right, the new book is "robert b. parker's stone's throw". mike lupica, you've done it again. thank you very much for being on this morning. >> thank you, mike. >> any other movies? >> no. >> don't do that to me when we have jeff daniels coming on the show. he's here monday. >> we get the dumb and dumber debate coming up. >> i'm going to watch it again this morning. >> no, you're not. >> yeah, i am. >> she'll watch it with me. >> she will not do that. >> that does it for us this morning. stephanie ruhle picks up the coverage right now. >>> hi, there. i'm stephanie ruhle here in new york city. it is wednesday, september 8th. let's get smarter. this morning, communities across the northeast and southern u.s. are still picking up the pieces from what president biden calls a code red situation. the extre