Stocks rallied broadly in July, with the Nasdaq paring earlier losses. And Wall Street is debating if markets have bottomed yet. Growth stocks like tech have fallen broadly this year on the back of financial meltdowns, recessions and other risks. And Morgan Stanley warned in an Aug. 3 report that investors shouldn’t get ahead of themselves as the Nasdaq is up 16 percent since June 16. “This isn’t a market bottom, things aren’t going to go consistently higher from here as we’ve been buying a few tech products for a while, so everyone has less room to make as post-Covid demand = pre-Covid,” the bank’s analysts wrote. “Fact check – as opposed to ‘big tech’, consumer-oriented companies are giving more cautious guidance,” he said. Morgan Stanley listed a few examples: Sony disappointed with guidance, Microsoft and Apple delaying hiring. Microsoft also warned that small and medium-sized businesses are spending less on IT and that the PC market will continue to decline in June, according to the investment bank. Morgan Stanley is an “emerging” Apple. According to Morgan Stanley, consumption in China has slowed, thanks to the impact of the Covid lockdowns. That slowdown will hit the e-commerce and consumer discretionary sectors, he said. Why stocks may be falling The bank said stocks are now falling for a few reasons – inflation expectations are falling on commodity prices and interest rate hikes are weighing less on technology stocks. Revenues are “lacking, but not as bad as feared,” he added. US stocks have largely continued their rally this week. The Nasdaq is up 2.7% so far, while the S&P 500 is up 0.5% for the week, hitting its highest level since Wednesday in June. But Morgan Stanley sounded a note of caution about the future. Read more An asset manager predicts the next bull market – and explains how to position it Here’s how to invest in yield to beat a bad year for stocks and bonds – Has the market bottomed out on the merits? Here’s what Wall Street had to say after the U.S. stock market rebounded in July: “Earnings won’t go up — it’s not about the current earnings season (that’s backward-looking) but that we’re on the wrong side of the profit cycle.” And it’s the next earnings season and the one after that, where we’re going to see the write-up, where we’re going to see higher online pressure and average margin change,” the analysts said. Tech stock Morgan Stanley says Samsung is a tech stock that can weather the “storm.” He said the firm has “tremendous amounts of resources” that it hasn’t yet monetized and has seen a “very significant” level of depreciation since the end of 2018. Morgan Stanley valued the stock at 70,000 Korean won ($53), up about 14%. The bank said it likes companies that have the potential to consistently grow better than their peers, citing chipmakers TSMC and Alchip as two examples. Morgan Stanley gave TSMC a price target of NT$780, a 55% upside. He also gave Alchip a price target of NT$1,420, representing an upside of more than 120 percent. Morgan Stanley said it will sell technology units such as cloud semiconductors and Japanese semiconductor capital equipment.