The 'single biggest risk' to investors is being widely ignored — and Morgan Stanley warns it could spawn a recession within months

The risk of a downward spiral in the stock market and economy is growing by the day, according to Morgan Stanley.

While geopolitics has been the clear driver of recent market action, the spotlight will swing back to corporate earnings growth over the next few weeks.

"In our view, this is the single biggest risk to the economic expansion that is not discussed in the mainstream," said Michael Wilson, the chief US equity strategist at Morgan Stanley, in a recent note to clients. A prolonged earnings downturn could imperil Main Street's contribution to the economy if companies respond by slowing hiring. The latter is a the big risk to an economy that has been upheld mainly by consumer spending.

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