Morgan Stanley analysts warn that investors eyeing stocks as the market rallies ahead of the Fed's policy meeting will be disappointed later. This is because this stance tends to contradict the stance of the Fed which is expected to still raise its benchmark interest rate at the Federal Open Market Committee (FOMC) meeting on January 31 – February 1 2023. Morgan Stanley analyst Michael Wilson said the better movement in stock prices is starting to convince many investors to follow suit and encourage them to participate more actively. "We think the recent price action is more a reflection of the seasonality of January and short covering after the massive sell-off in late December and a brutal year," said Wilson. They said, in fact the company's performance was worse than expected, especially on the margin side. "Second, investors seem to have forgotten the cardinal rule of 'Don't Go Against the Fed'. Perhaps this week will serve as a reminder," he continued. Fed officials are expected to raise interest rates by 25 basis points at the FOMC meeting this week. This step will be in line with a number of recent data showing that the Fed's aggressive policy to suppress inflation has been successful. The S&P 500 index has rallied since earnings season began. Even as signs of a slowdown mount, investors tend to buy up shares of issuers that exceed expectations and sell shares of issuers that fail. Bloomberg Intelligence analyst Wendy Soong said the dynamics related to the company's restructuring efforts and cost-cutting plans tend to create more investor confidence. On the other hand, Wilson cautioned that the Fed's unwillingness to shift to a more dovish stance, coupled with its worst earnings performance since 2008 is likely to mislead investors. "We think it's going to lead to the end of this bear market pretty soon," he said. #commodity #equity #technicalanalysis #technology #news #investors #intraday #investing #fundamentalanalysis #stake #markets #liquidity #nasdaq