Morgan Stanley Analysts: Weaker U.S. Employment Data Could Trigger Risk-Off Trading

According to Morgan Stanley analyst Wilson, weaker U.S. employment data could prompt the market to adopt a risk-averse trading stance, regardless of whether the Federal Reserve's first interest rate cut is 25 or 50 basis points.Wilson also noted that if employment conditions improve, the Fed may cut rates by 25 basis points by mid-2025, potentially boosting stock market valuations. However, forecasters at Goldman Sachs and JPMorgan Chase warn that interest rates are becoming less significant for stocks amid uncertainty about the economic outlook.Goldman Sachs strategist David Kostin emphasized that economic growth is now the primary driver of stock market performance, as Citigroup's index reveals more analysts have been lowering profit expectations recently.