Investors ought to enjoy this current market rally while it lasts, Morgan Stanley’s Michael Wilson stated. The Wall Street company’s primary U.S. equity strategist thinks the current rally, which follows the Federal Reserve’s aggressive action to lower inflation, will not last long — as business revenues are presumed to begin degrading. “While the bond market is starting to assume they get inflation under control, it may come with a heavier cost than normal, potentially a recession while they are still tightening, which may leave a very small window for stocks to work before earnings surprise on the downside,” Wilson stated in a note to customers. “We think that window is now but it can shut quickly. Risk reward is poor after the recent rally so trade accordingly as time may be running out,” he included. The S & P 500 simply notched its finest month because November 2020, getting more than 9% in July, as financiers’ worries about the aggressive pacing of rate boosts began to subside and they wager that inflation has possibly peaked. The rally in July followed an 8% sell-off in June. Wilson, among Wall Street’s greatest bears, stated the previous decrease in stocks didn’t totally show the danger of an economic crisis as revenues generally fall far more considerably in a recession. “While talk of recession was rampant during that sell-off and valuations reached our target P/E of 15.4x, we do not think it properly discounted the earnings damage that will entail if we are actually in a recession right now,” Wilson stated. If a financial slump shows up, the equity standard might fall towards 3,000, or off about 27% from Friday’s close, Wilson stated. He included that the S & P 500 might bottom in the variety of 3,400 to 3,500 if the U.S. prevents an economic crisis. The standard struck a low of 3,636.87 on June 17. — CNBC’s Michael Bloom added to this report.