Morgan Stanley strategists said strong corporate earnings expectations have eased the impact of the S&P 500's valuation pullback. According to Sina Finance, the team led by Michael Wilson said more than 40% of Russell 3000 stocks have fallen at least 20% since June, while the S&P 500's forward price-to-earnings ratio has dropped to 19 times, the lowest level since March. The strategists added that the median earnings growth rate for individual stocks remains around 15%, and the breadth of earnings upgrades for high-quality S&P 500 constituents has returned to a cycle high.