One of Wall Street’s most vocal bears is doubling down on his short-term bullish call on equities a week after his initial view was met with skepticism by clients.

Morgan Stanley’s Michael Wilson sees stocks grinding higher as markets transition to expectations of falling inflation and lower interest rates, he said in a note Monday.

After his call last week was “met with doubt from clients,” Wilson said a pullback in bond yields should provide fuel for the next leg of the tactical rally, “until we get full capitulation on 2023 earnings estimates, something we think may take a few more months.”

The strategist, who correctly predicted this year’s slump, sees the S&P 500 Index bouncing as much as 15% if it breaches its 200-week moving average of 3,605 points, about 4% below Friday’s close. A similar view is held by Stifel Nicolaus & Co. strategists, who said in a separate note they see the benchmark rallying to 4,300 points in the next 6 months as inflation cools and recession is pushed back to the third quarter of next year.

The gauge jumped 2.4% to 3,752.75 on Friday to notch its best week since June amid technical support and as some companies reported better-than-expected earnings. Appetite for bullish wagers is on the rise as traders tire of reciting the same-old bearish mantras attached to elevated inflation and monetary hawkishness.

Not all strategists are so sanguine. Those at Goldman Sachs Group Inc. say share prices “do not reflect the risk of a US recession that many investors expect during the coming year,” they wrote in a separate note, favoring reasonably valued defensive sectors.

The US government’s first estimate of third-quarter growth is due this week. Gross domestic product may have expanded at a 2.3% annualized rate during the July-September period after contracting in both the first and second quarters, economists surveyed by Bloomberg project.

“While some may argue a recession is inevitable over the next 6-to-12 months, the market will not price it, in our view, until it is definitive,” Morgan Stanley’s Wilson said.

This article was provided by Bloomberg News.