Thoughts on the Market

Although the Fed’s surprise hawkish turn in its latest policy decision caught markets off-guard, the monetary tightening process may actually have begun months ago.

Original release on May 21st, 2021: Consumer spending should drive strong business investment in the months ahead, driving global GDP above its pre-COVID-19 path. But inflation may be a risk to watch.

Although investors often look to the past to assess current market conditions (such as a post-pandemic recovery or rising inflation), one year in particular may serve as an interesting guidepost.

Will negotiations on a U.S. infrastructure deal lead to a bipartisan bill or a Democrats-only bill? The answer matters quite a bit for fixed-income investors.

Over the past few weeks, European equity flows have been at the highest levels in three years. Could a period of consolidation be ahead?

While the outlook for growth and inflation looks strong through next year, both may disappoint lofty investor expectations—and bring consequences for some stock sectors.

This month’s U.S. consumer price inflation data showed a 5% rise versus a year ago, yet markets seemed unconcerned. A look at why markets could be looking past rising inflation readings.

The European Central Bank may soon announce the trial launch of a digital euro. Reza Moghadam, Morgan Stanley's Chief Economic Advisor, digs into potential risks and innovations.

With tensions not abating, investors should prepare for a world where these major economies are significantly less integrated. Michael Zezas explains.

Chief Cross-Asset Strategist Andrew Sheets and Head of Fixed Income Strategy Vishy Tirupattur cover a key topic on the minds of many investors: where to invest now?Mortgage Backed Securities (MBS) and Collateralized Mortgage Obligations (CMO)Principal is returned on a monthly basis over the life of the security. Principal prepayment can significantly affect the monthly income stream and the maturity of any type of MBS, including standard MBS, CMOs and Lottery Bonds. Yields and average lives are estimated based on prepayment assumptions and are subject to change based on actual prepayment of the mortgages in the underlying pools. The level of predictability of an MBS/CMO's average life, and its market price, depends on the type of MBS/CMO class purchased and interest rate movements. In general, as interest rates fall, prepayment speeds are likely to increase, thus shortening the MBS/CMO's average life and likely causing its market price to rise. Conversely, as interest rates rise, prepayment speeds are likely to decrease, thus lengthening average life and likely causing the MBS/CMO's market price to fall. Some MBS/CMOs may have “original issue discount” (OID). OID occurs if the MBS/CMO’s original issue price is below its stated redemption price at maturity, and results in “imputed interest” that must be reported annually for tax purposes, resulting in a tax liability even though interest was not received. Investors are urged to consult their tax advisors for more information. Government agency backing applies only to the face value of the CMO and not to any premium paid.

New macro data on employment and consumer prices are unlikely to settle market uncertainties about inflation and course of the recovery. Mike Wilson explains.

The pillars that have supported extraordinary action by the Federal Reserve are now starting to shift. That means support could be withdrawn. The question is, when?

Commodities prices have seen big moves over the last several months, but could a potentially stronger dollar and the mechanics of supply and demand cool the rally?

Although the Biden administration has been slightly less vocal with respect to China, investors shouldn’t sleep on the possibly of renewed U.S.-China tensions.

Why China’s ambitious blueprint to shape tech standards may have significant impact on the future of tech. Insight from Shawn Kim, Head of Asia Technology Research.

Despite some inflation and labor market risks, the outlook for the rest of the year anticipates strong growth in the U.S. economy. Chief U.S. Economist Ellen Zentner discusses with Andrew Sheets. 

Concern has been rising that potentially higher inflation could make Congress lose its nerve on a multi-trillion dollar "Build Back Better" plan. Here’s our analysis.

Where and how consumers buy their groceries may be forever changed post-pandemic. We deliver some key takeaways on the food retail industry.

Fresh off of last week’s mid-year outlook, Chief Investment Officer Mike Wilson details investor reaction to some of the more out-of-consensus views.

Consumer spending should drive strong business investment in the months ahead, driving global GDP above its pre-COVID-19 path. But inflation may be a risk to watch.

While robust global growth is a positive for markets, it may also bring higher prices, tighter policy and higher interest rates. A look at some possible twists and turns ahead.

All indications suggest that Congress is serious about passing an infrastructure bill, but here’s why investors may want to consider all possible outcomes.

Graham Secker, Head of Morgan Stanley's European and UK equity strategy team, shares why Europe may be set to outperform global equity markets this year.

Chief Investment Officer Mike Wilson explains why sector and style preferences—along with selective stock picking—may be the key to success for the rest of 2021.

The debate over inflation was center stage this week and although the current environment is a far cry from the 1970s, rising prices could mean complications for both companies and central banks.

Labor shortages and inventory constraints are weighing on U.S. manufacturing and shipping. How severe could the impact be to U.S. GDP and multi-industry revenues?

Differing U.S. infrastructure policy approaches highlight the ongoing difficulties of bipartisanship in Washington. Here’s one possible outcome.

Original release April 16th, 2021: Keeping tabs on how other investors are trading can do more than just satisfy curiosity. It can provide a window into trends and current market debates.

Amid pricey valuations and growing evidence of labor and supply chain issues investors may want to adjust focus as we exit the early stages of the recovery.

With U.S. labor market numbers coming in below expectations, Andrew Sheets assesses how jobs data feeds into market and policy maker thinking about the road to recovery.

Amid declining rates of vaccinations in the U.S, virus mutations and a crisis in India, is herd immunity from COVID-19 still achievable? The latest insights from Biotech equity analyst, Matthew Harrison.

The Supreme Court is expected to deliver a decision soon on this key case for the future of the Affordable Care Act and the 20 million Americans who have acquired coverage under it. The outcome could have significant impacts for investor too.

The red-hot U.S. housing market brings to mind some unhappy memories of the 2006 bubble, but there are some key differences this time around.

The reality of reopening is anything but cut and dry. And how the market is pricing, or failing to price, nuances should continue to be a key theme.

Plans to introduce digital currencies are gaining momentum among the world’s central banks. But what level of disruption will it bring to the financial system?

Last night, President Biden laid out his vision to rebuild the existing U.S. infrastructure. Here are three takeaways and sectors to watch as negotiations unfold.

Summer months have historically seen lower, more volatile returns, but strong year-to-date gains and potentially higher inflation could intensify that trend.

Europe's 'unloved' quality among global investors is not the only reason to feel optimistic about the potential for outperformance among European equities. Chief European Equity Analyst Graham Secker explains.

High expectations around reopening may already be substantially priced into markets, pointing to new risks around how the reopening actually plays out.

Stresses on the electrical grid, climate policy, and national security are only a few of the issues we will confront as we transition to EVs.

Price, charging infrastructure and dirty battery production are limiting the impact of EVs, but look to fleet operations to lead the way to broader adoption.

With a sizable infrastructure bill moving through the U.S. Congress, support from coal producing states, often considered unlikely, may be a factor that ultimately ensures its passage.

Green investment is on investors' minds this Earth Week: Today, a look at key investment themes across carbon capture, plastics and agri-food developments.

Earnings season is well underway and some stocks are selling-off despite strong economic data. Is the recovery now completely discounted?

Keeping tabs on how other investors are trading can do more than just satisfy curiosity. It can provide a window into trends and current market debates.

Why the pet care industry—which was already growing pre-pandemic—may emerge as one of the fastest growing sectors over the next decade.

What stock sectors could fundamentally benefit from infrastructure spending? To answer this question, it’s important to follow the money.

Original release on March 25th, 2021: Amid a generally conservative outlook for emerging markets, key differentiators are their scope for policy action, pace of vaccine rollout and equity valuations.

How are oil & gas companies and U.S. utilities tackling the complex transition to a lower carbon future? Expect a lot of divergence in approach.

Since last year, bonds of all stripes have seen so-so returns and high stock market correlation. Is it time to question their value as a portfolio diversifier?