Morgan Stanley's Mike Wilson Sees 'Crystal Clear' Earnings Growth, Says 'Big Beautiful Bill' Will Fuel Consumer Stocks Rally

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clear,” driven by a stabilizing Federal Reserve and legislative tailwinds that are set to reignite the consumer sector.Wilson identified consumer goods as his top conviction pick for the year, arguing the sector is primed for a rebound after enduring a “rolling recession.”Don't Miss:Fast Company Calls It a ‘Groundbreaking Step for the Creator Economy' — Investors Can Still Get In at $0.85/ShareSam Altman Says AI Will Transform the Economy — This Platform Lets Investors Back Private Tech EarlyHe cited a convergence of favorable factors—specifically falling interest rates and fiscal stimulus—that will unlock pent-up demand.“That's an area where it's going to get a big boost from the ‘Big Beautiful Bill’ from the tax cuts in the first half of this year,” Wilson said.He noted that the combination of these policy measures and the “attack on affordability” creates a robust environment for consumer stocks, which have yet to fully price in the recovery. Here’s how consumer goods index and certain ETFs tracking the sector have performed.Index / ETFs6-Month PerformanceYTD PerformanceOne-Year PerformanceDow Jones U.S. Consumer Goods Index9.62%-1.40%6.42%ProShares Ultra Consumer Staples (NYSE:UGE)-8.27%1.68%-0.35%iShares US Consumer Staples ETF (NYSE:IYK)-4.97%-0.43%5.25%Trending: This Real Estate Fund Pays 10x More Than the Average Savings Account – Invest From Just $100Contrary to fears of a slowdown, Wilson argues the market's earnings picture is strengthening. “The earnings picture is crystal clear to us,” he stated, forecasting earnings growth in the “high teens” as the rally broadens beyond the tech sector.A key pillar of this optimism is a shift in Federal Reserve policy. Wilson highlighted that the Fed has begun purchasing assets again to stabilize funding markets—a move he described as a “wild card” that has now been resolved in favor of the bulls.“The Fed now is addressing these liquidity concerns… proactively,” Wilson noted, adding that this support removes a significant layer of risk for investors.While the long-term outlook remains positive, Wilson cautioned that corrections are inevitable in a midterm election year.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,966.28 +44.82 (+0.65%)Dow 3049,504.07 +237.96 (+0.48%)Nasdaq23,671.35 +191.33 (+0.81%)Russell 20002,624.22 +20.32 (+0.78%)VIX14.49 -0.96 (-6.21%)Gold4,500.90 +40.20 (+0.90%)Trending tickersBTC-USD Bitcoin USD 90,455.94 -229.90 (-0.25%)ETH-USD Ethereum USD 3,089.20 -0.20 (-0.01%)XRP-USD XRP USD 2.10 +0.01 (+0.56%)LMT Lockheed Martin Corporation 542.92 +24.48 (+4.72%)NOC Northrop Grumman Corporation 618.82 +28.03 (+4.74%)PortfolioSign in to access your portfolioSign inTop gainersNBY NovaBay Pharmaceuticals, Inc. 19.16 +9.70 (+102.54%)CGON CG Oncology, Inc. 54.20 +12.27 (+29.26%)APLD Applied Digital Corporation 37.68 +5.74 (+17.97%)UWMC UWM Holdings Corporation 5.36 +0.65 (+13.80%)OPEN Opendoor Technologies Inc. 7.29 +0.86 (+13.37%)Top losersODD Oddity Tech Ltd. 35.42 -3.09 (-8.02%)MDGL Madrigal Pharmaceuticals, Inc. 514.06 -42.16 (-7.58%)ALM Almonty Industries Inc. 8.63 -0.68 (-7.30%)MMSI Merit Medical Systems, Inc. 86.38 -6.80 (-7.30%)WVE Wave Life Sciences Ltd. 13.84 -0.99 (-6.68%)Most activeINTC Intel Corporation 45.55 +4.44 (+10.80%)OPEN Opendoor Technologies Inc. 7.29 +0.86 (+13.37%)NVDA NVIDIA Corporation 184.86 -0.14 (-0.08%)PLUG Plug Power Inc. 2.1900 -0.1300 (-5.60%)ONDS Ondas Holdings Inc. 13.69 -0.32 (-2.28%)Top economic eventsEarnings eventsMy earnings eventsEarnings events