A synopsis of the major reports issued globally by Morgan Stanley strategists in the past week. Please see full versions of these articles on our Client Link Website. Please contact your Morgan Stanley representative for access if needed.
US Equity Strategy: Growth Matters
Adam S. Parker
There's potential we remain in a band of slow economic growth for some time. There is also the possibility of stronger growth helping corporate profitability in the 2H of 2013. Does it matter whether a stock is freshly minted as a growth (or non-growth) stock or has been persistently in growth (non-growth) status for the past several years?
European Equity Strategy: An inflection point in US monetary policy would suggest buying cyclical value
Graham R Secker
Greater two-way debate on Fed policy should not derail equities given the improving macro outlook. But emphasis will start to shift from PE expansion to EPS growth and a preference for cyclical and/or value stocks.
US Interest Rate Strategy Insight: Don’t Fear the Taper
Chairman Bernanke reduced our conviction in our 7s/30s curve steepening view, at least until the next nonfarm payrolls report on June 7. We debate the future of carry and expected rolldown and conclude that a higher realized volatility environment would reduce the relative attractiveness of the intermediate sector against the long end, while still leaving an absolute advantage intact. We also reassess the impact of tapering expectations on the yield curve in light of the FOMC Minutes and the New York Fed primary dealer survey. We don't fear the taper, we just need less volatility.
US Equity Strategy: What Did We Learn from EPS Season?
Adam S. Parker
First Quarter Earnings: As 92% of the S&P 500 market cap have reported, earnings season is coming to a close. In aggregate, companies have exceeded EPS estimates, modestly missed on revenues, and continued to issue negative guidance. Earnings results are pacing 5.2% ahead of expectations - 4.0% excluding financials (page 2) driven primarily by financials, telecom, and discretionary.
A synopsis of the major reports issued globally by Morgan Stanley economists in the past week. Please see full versions of these articles on our Client Link Website. Please contact your Morgan Stanley representative for access if needed.
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