Morgan Stanley Says Market Correction Won’t End Until Investors Reduce Risk Exposure

The major averages are coming out of their worst week since October as a retail frenzy has scared investors, and Morgan Stanley believes there are more setbacks to come.

However, the firm does not believe the market is in a full blown bubble.

“We don’t believe the correction is complete until leverage is reduced by institutional and retail investors,” said Michael Wilson, chief equity strategist at Morgan Stanley, in a note to clients .

“While this correction is likely to get worse and feel bad in the short term, it is not a bubble or like 2000 for many reasons,” he said.