Major US stock-market strategists are starting a bull-bear debate, with pessimist  Michael Wilson of Morgan Stanley warning that the latest rally is a head fake, while Bank of America’s Savita Subramanian raises her 2023 target for the S&P 500 Index.

Wilson was one of the few Wall Street strategists to see the 2022 meltdown coming, earning him the top spot in last year’s Institutional Investor magazine survey, and has remained one of the most bearish voices in the market even as the S&P rallied 9% to start 2023. At this point, he sees too many troubling triggers to believe the gains will stick.

“Is this finally the breakout to confirm a new bull market?” Wilson wrote in a note to clients Monday. “The short answer is no.” In particular, he sees risks in lofty valuations, a narrow breadth of stocks driving the gains and the outperformance of defensive stocks.

But where Wilson is looking at a half-empty glass, Subramanian says she sees a “half-full” one. She raised her 2023 year-end price target for the S&P 500 to 4,300 from 4,000. The equities benchmark topped 4,200 on Friday before drifting lower.

“The era of easy money is behind us, but that might be a good thing,” she wrote in a note to clients on Sunday. “Corporate America has shifted focus to structural benefits — efficiency/automation/AI — and have bought themselves time to adapt via long-dated fixed-rate debt. Old economy cyclicals, capital-starved since 2008, have become disciplined and self-sufficient, evidenced by lower betas and more stable earnings.”

History appears to be on Subramanian’s side, as a strong first 100 days in the S&P 500 typically means significant upside for the rest of the year.

One short-term risk for the market is the ongoing debate in Washington over raising the US debt ceiling. Wilson said a resolution in the negotiations may briefly drive stocks higher, but “we would view that as a false breakout/bull trap.”

Others, including JPMorgan Chase & Co. strategists led by Dubravko Lakos-Bujas are also warning about more market volatility as the talks drag on. President Joe Biden and Republican House Speaker Kevin McCarthy are set to meet Monday.

--With assistance from Michael Msika and Jan-Patrick Barnert.

This article was provided by Bloomberg News.