TechFlow news, According to Chaoxiang Research, Morgan Stanley released its US stock strategy weekly report on July 20. The report pointed out that the market diffusion trend is continuing, and the momentum trading risk in the semiconductor sector has not been fully released. The silver stock price comparison model shows that semiconductors may still have about 15% downside in the short term, and earnings revision breadth has fallen back from historical extremes. In the past two months, consumer durables and the transportation sector outperformed the S&P 500 by about 12 percentage points respectively, and the equal-weight index continues to outperform the market-cap weighted index.
In terms of allocation, Morgan Stanley continues to recommend overweighting cloud providers (Microsoft, Google, Meta, Amazon) and underweighting semiconductors within the technology sector. The equal-weighted P/E ratio of the four giants has fallen to 21 times. Consumer durables and transportation are the clearest directions for capital inflows, and the earnings revision breadth of the transportation sector has reached the strongest level since 2021. Market style is gradually switching to high-quality factors, and the earnings revision breadth of high gross margin and high sales stability factors continues to strengthen. The year-end target for the S&P 500 is 8,000 points, and 7,000 points is a key technical support level.
