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Morgan Stanley: “The Selling Has Just Begun; This Correction Will Be The Biggest Since February”

At the same time as Morgan Stanley’s institutional traders were warning that the current tech sell is “different this time”, warning that “you can’t have a >$100bn loss in a well held name and not have collateral damage” and calculating that “the performance of HF longs based on 13F holdings shows the last few weeks have been a ~2 standard deviation loss event”, Morgan Stanley’s chief US equity strategist, Mike Wilson, had some even harsher words: “the selling has just begun and this correction will be biggest since the one we experienced in February.

The reason for that is the same one Nomura discussed on Friday: “the most important trade of the past decade is now reversing” namely the reversal of the growth/value which has also commingled with the “momentum trade”, abd which means that the growth/tech “market leadership” that defined the market for the past decade is now gone at least for the time being.

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