Weekly Warm-up: From Early Cycle to Mid Cycle

研报英文原文证据摘录

Weekly Warm-up: From Early Cycle to Mid Cycle

Idea

August 3, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMUS Equity Strategy | North America Michael J Wilson

Equity Strategist

Weekly Warm-up: From Early M.Wilson@morganstanley.comAndrew B Pauker +1 212 761-2532

Andrew.Pauker@morganstanley.com +1 212 761-1330

Cycle to Mid Cycle Michelle M. Weaver, CFA

Michelle.M.Weaver@morganstanley.com +1 212 296-5254

One of the most significant momentum drawdowns in history Diane Ding, Ph.D.

appears to have ended, shifting the focus to what leads next. QuantitativeQian.Ding@morganstanley.comStrategist +1 212 761-6758

Our work points to EPS quality at the factor level, and today we Nicholas Lentini, CFA

highlight a more targeted AI adopter screen. EquityNick.Lentini@morganstanley.comStrategist +1 212 761-5863

• An Early-to-Mid Cycle Transition Has Begun, Favoring Quality… As the

business cycle matures and post-recession operating leverage moderates, we

believe leadership should rotate from low quality toward companies with

more stable earnings, strong margins and operational efficiency. With high

quality representing 42% of the S&P versus 28% for low quality—and

median stock earnings growth accelerating to 14% as revisions breadth

improves—the setup should support greater index resilience, broader

participation and 8,000 on the S&P by year-end, in our view.

• One of the Worst Momentum Sell-Offs in History… Momentum extended

its decline through the first three days of last week, bottoming as a large

player reportedly exited most of its public-equities portfolio—a typical

endpoint for this kind of unwind. Semis troughed almost exactly where our

Silver-stocks analog suggested and we believe likely have further near-term