The survey showed the majority of indices saw year lows in Q2 and have since made some progress, but they are still far from recovering year-to-date losses. The MSCI (Morgan Stanley Capital International) global equity index has lost 16% of its value so far this year.

Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management says, “As enticing as this rally has been…it is still no more than a bear-market rally. We caution investors about getting drawn into harm’s way.”

“Inflation is far from tamed, earnings estimates need to be adjusted and stock market enthusiasm just isn’t supported by other market dynamics.”

In the month of August nearly 17 indices questioned by Reuters and more than 150 equity market analysts indicated that the remaining months of the year would see barely single-digit gains. If realized, none of those would be sufficient to make up for the double-digit losses they have already incurred this year. There is a great deal of ambiguity about whether the stock market will even achieve those median expectations, which were previously revised downward from earlier polls.

Sebastian Raedler, head of European equity strategy at BofA said, we expect a continued fade in growth momentum, implying equity market downside. While a number of recent macro data points have been favourable, we believe this does not change the underlying narrative.

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