Stock market crash: S&P 500 will fall more but 3 sectors show promise – Markets Insider

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The S&P 500 still has room to fall, but investors shouldn’t give up on individual stocks as a few sectors have potential, according to Morgan Stanley’s chief US equity strategist Mike Wilson.
The long-time stock market bear sees the S&P 500 bottoming between 3,000 and 3,200, representing a decline of about 20% at the low end.
“We don’t know if it’s going to be this quarter or next quarter, but it’s probably some time in that timeframe,” he told Bloomberg TV on Thursday.
For now, investment grade debt looks more attractive than the S&P 500, especially in the next six to 12 months, he added.
Investors should also get away from the broad index and instead start looking at individual stocks, even though the average stock has been in a bear market for more than a year, according to Wilson.
“You shouldn’t abandon stocks because there’s plenty of individual names that probably are extremely attractive,” he said.
He named semiconductors, consumer discretionary spending and communication services as promising sectors. While acknowledging they may have a bit more downside, Wilson said they have “made a step in the right direction.”
In general, he said Morgan Stanley has a dual strategy favoring “superior operators” that can deliver operating profits and cash flow during market turbulence as well as companies that have offered realistic or even overly pessimistic guidance and already downgraded their estimates repeatedly. 
“That’s the barbell that we think makes sense, and we’re trying to get clients into those types of strategies,” he said.
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