Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief

U.S. Equity Strategist for Morgan Stanley. Along with my colleagues bringing you a variety

of perspectives, I'll be talking about the latest trends in the financial marketplace. It's

Monday June 15th at 8.30 a.m. in New York so let's get after it. During the first

few weeks of June equity markets got a bit frothy, and while overall positioning remained on the

lighter side, pockets of speculation began to appear, particularly in certain parts of the

retail investment community. That froth needed to be taken out, and whether it was the Fed meeting representing a

sell the news event the spike in COVID-19 cases in some states or the fact that a

Democratic sweep is starting to look more likely doesn't really matter.

Corrections usually occur because markets are over-bar. is starting to look more likely doesn't really matter.

Corrections usually occur because markets are over-bought, while the reasons are identified

after the fact.

There are always reasons for markets to correct or rally, and we find this after the fact analysis akin to Monday morning

quarterbacking and not very helpful. Our view is at the last week was the beginning of a much

overdue correction in a new bull market.

As I've been discussing on this podcast for the past few months,

the V-shaped recovery in markets is foreshadowing a V-shaped recovery in the economy and

earnings.

It's following the same pattern we witnessed after the great

financial crisis recession. In fact, the correction is right on schedule with that period too, and it's

likely not finished. More specifically, I'm targeting 2,800 on the downside for the S&P 500 before this bull market resumes in earnest.

Beyond our simplistic reasoning that this is how new bull markets trade and our technical analysis of price support levels, our positive

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