us stocks would be in much worse shape in 2023 if it wasn’t for “excessive” fiscal policy from the government and explosive moneysupply growth in recent years that’s the latest take from morgan stanley’s mike wilson the bank’s chief investment strategist who as marketwatch’s steve goldstein pointed out earlier seems to never miss an opportunity to recall how wrong his market calls have been this year in his latest note wilson told clients and the financial press that excessive government spending has helped prop up the us economy and markets to a degree that wilson and his team failed to anticipate “part of the reason we’ve found ourselves offside this year is that the fiscal impulse returned with a vengeance and remained quite strong in 2023 something we didn’t factor into our forecasts” wilson said in the note in an accompanying chart wilson noted that fiscal spending looks particularly excessive when compared with the us unemployment rate which fell to 35 in july according to data from the department of labor released on friday to be sure wilson was one of a select few on wall street to correctly anticipating last year’s inflationdriven selloff but heading into the new year he expected stocks would tumble to new lows during the first half of 2023 and after hanging on to his bearish view for months in spite of a powerful rally in equities driven by the artificial intelligence craze and a surprisingly resilient us economy he’s recently taken the opportunity to reflect on why he got it wrong while acknowledging the possibility that the rally could continue see morgan stanley’s mike wilson admits ‘we were wrong’ about 2023 stockmarket rally but refuses to throw in the towel see morgan stanley’s mike wilson is warming to the us stockmarket rally here’s what would make him turn bullish it’s possible even likely that the government’s excessive spending could continue at least until it comes time to raise the debt ceiling again in 2025 fitch ratings last week cited projections for ballooning budget deficits for helping to inspire its decision to strip the us of its aaa credit rating “the main takeaway for the equity market this year is that fiscal policy has allowed the economy to grow faster than forecast giving rise to the consensus view that the risk of a recession has faded considerably furthermore with the recent lifting of the debt ceiling until 2025 this aggressive fiscal spending could continue” wilson said the biggest problem with spending so much during good economic times however is that it limits congress’s ability to act when another recession inevitably arrives that could create problems for corporate earnings and by extension stocks down the road wilson said “if fiscal policy is showing such little constraint in good times what happens to the deficit when the next recession arrives” us stocks were trading higher early monday after the sp 500 spx logged its fourth straight day in the red on friday capping off the worst week for stocks since march the index was up 05 in recent trade near 4500 while the nasdaq composite comp was 02 lower at 13881 the dow jones industrial average djia which has surged higher over the past month as traders have favored some of this year’s market laggards was up 300 points or 09 at 35362