“The rolling bear market continues to make progress and there is growing evidence that it is morphing into a proper cyclical bear market,” Morgan Stanley writes.

Morgan Stanley’s top stock strategist is concerned that actions by the Federal Reserve are drying up liquidity more than most investors predicted.

The S&P 500 is off more than 8.5 percent from its all-time high in September, while the Dow Jones Industrial Average is off by more than 7.6 percent.

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