Dan Skelly: "We still don't see an economic contraction"

The first part of the bear was this inflation and rates and derating in the [P/E] multiple.  And we've seen that play out.  Multiples in the S&P are off 20% or so year-to-date.  The second part of it, in our view, is the earnings hit.  And so we have seen, obviously, blowups in some of those most acutely sensitive to over-earning in the Covid period - so the retailers of the world who over-ordered inventory and maybe have a little bit of skew to that lower-end income scale who's getting particularly impacted by food and gas today.  So we've seen that.  We think that that basically broadens out a bit more to some other parts of the market.  That being said, we see this being limited to a multiple and earnings hit.  So, yes, there's probably a volatile summer ahead of us, but we still don't see an economic contraction.  And with that, you're probably going to be limited to 5, 10% further downside [in the stock market.]

~ Dan Skelly, head of market research & strategy, Morgan Stanley Wealth Management, Bloomberg TV interview, June 10, 2022