Morgan Stanley goes against the trend and is bullish on US stocks: a weakening US dollar will boost corporate profits.

Michael Wilson, Chief US Equity Strategist at Morgan Stanley, stated that a weak US dollar will support US corporate profits and help US stocks outperform other global markets. As many strategists on Wall Street are declaring the imminent end of the "American exceptionalism" era, Michael Wilson's relatively bullish view on the US stock market stands out. Wilson pointed out that the lower volatility of profit growth and the fact that US companies are considered higher quality are reasons why he is optimistic about the US stock market. In a report on Monday, he wrote, "We are still in the late-cycle backdrop, and the relative strength of quality stocks and large-cap stocks should continue." Michael Wilson predicts that the S&P 500 index will remain in the range of 5000-5500 points. He added that for the US stock market to experience a larger rally, the US and China need to reach a trade agreement, profit expectations need to rebound significantly, and the Fed may need to ease monetary policy. In contrast to Michael Wilson, Mislav Matejka, a strategist at J.P. Morgan, is one of those who lean towards international stocks rather than US stocks. In a recent report, Mislav Matejka stated that non-US stocks offer more attractive risk-return profiles, especially as President Trump continues to flip-flop on tariff policies and the risk of an economic downturn remains high. Mislav Matejka is not the only one cautious about US stocks. Alain Bokobza, head of asset allocation at Societe Generale, warned that if Trump continues his trade policies, investors will continue to reduce their exposure to US stocks and the US dollar. The Bank of America strategist team, led by Michael Hartnett, advised investors last week to sell on rallies in US stocks and the US dollar, warning that conditions supporting their continued rise are not yet in place.