(Bloomberg) -- The S&P 500 Index’s best week in a year was just a bear market rally, according to Morgan Stanley’s top-ranked strategist.

Technical and fundamental support is missing, wrote Michael Wilson in a research note Monday. Citing a gloomy earnings outlook, weaker macro data and deteriorating analyst views, “we find it difficult to get more excited about a year end rally,” he added, noting that the gain “looks more like a bear market rally rather than the start of a sustained upswing.” 

Sentiment was buoyed last week after Federal Reserve Chair Jerome Powell hinted the US central bank may now be finished with the most aggressive tightening cycle in four decades. Investor hopes for a soft economic landing saw the S&P 500 and the Nasdaq 100 indexes rise around 6%, while 10-year Treasury yields dropped. 

Still, concerns remain about the impact of higher-for-longer interest rates on demand, with companies flagging worries over the looming threat of an economic slowdown this earnings season. Wilson has maintained a steadfastly bearish view on equities this year. 

Further reading: BlackRock’s Boivin Says High Rates Still a Threat to Stock Rally

“The drop in Treasury yields was more related to the lower than expected coupon issuance guidance and weaker economic data as opposed to the bullish interpretation (for equities) that the Fed is going to cut rates earlier next year,” said Wilson, who was named as the best portfolio strategist by the latest Institutional Investor survey.

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