Good morning to the smartest corner of the internet.

On Monday we heard from four different Federal Reserve officials.

Each said some version of “interest rates will remain restrictive.”

Cleveland Fed President Loretta Mester, for one, said she no longer favored three rate cuts this year after seeing the last handful of inflation prints.

“It’s too soon to tell what path inflation is on, so we just need to collect more information on that,” she said in a Bloomberg TV interview.

In any case, yesterday marked the rare occasion a market strategist drew more attention than a policymaker.

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Bad news bear no more

Stocks keep breaking records, and the most prominent bear on Wall Street has capitulated.

Morgan Stanley CIO Mike Wilson — who’s held one of the Street’s weakest stock market outlooks for months — raised his S&P 500 price target to 5,400 by the second quarter of next year.

In a note to clients, he said stocks will enjoy further upside thanks to “robust earnings-per-share growth” of 8% this year and 13% in 2025. 

Before this week, he had predicted the benchmark index would plunge to 4,500 by the end of 2024.

For context, Wilson proved both prescient and contrarian in 2021 when he warned a stock market correction was due.

It happened a few months later, and to some, the sell-off cemented Wilson as a guy who could see around corners.

This year, though, that act seems harder to pull off. 

While Wilson has not turned into an outright bull, for now he’s ditched Team Bear, which now counts only JPMorgan. 

Over the last several days, Deutsche Bank and BMO have also raised their S&P 500 targets into bull territory. 

“With stocks continuing to hit new highs and an economy that isn’t showing any major cracks, I guess now is as good as anytime for bears to toss in the towel,” said Ryan Detrick, chief market strategist at Carson Group.

Detrick’s been bullish since the second half of 2022. He told me many of the bears who mocked his optimism at the time have since turned bullish. 

A few reasons Detrick remains upbeat: 

That said, it isn’t always a good sign when the final skeptic buys into a consensus view. 

The fewer the naysayers, the closer we may be to the top of the market or, at the least, some extra froth. 

Plus, in markets it often pays to be on the other side of a crowded trade. What happens when there are no more contrarians?

“This is somewhat worrisome,” Detrick said. “But with stocks up close to 50% from the October 2022 lows, it likely means the easy gains have been had. You can’t have a bull market without bulls is how I learned it.”

*At a glance:

Elsewhere:

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