Global Multi-Asset Viewpoint
March 31, 2019
GMA Viewpoint: Cyclical Assets Have Room to Outperform as Global Growth Recovers

Global Multi-Asset Viewpoint

GMA Viewpoint: Cyclical Assets Have Room to Outperform as Global Growth Recovers

GMA Viewpoint: Cyclical Assets Have Room to Outperform as Global Growth Recovers

Share Icon

March 31, 2019


Despite the strong recovery in many risky assets since Christmas, the market’s mood remains sober. Even as global equities have risen almost 17% over this period, the majority of investors have continued to be skeptical of the rally and lightly positioned.1 Investor survey data in March showed that fund manager positioning in global equities is at levels last seen in the prior mid-cycle slowdown of 2016.2

The dovish policy turn, most notably by the Federal Reserve (the Fed) but also the European Central Bank (ECB), was a major force that lifted risky assets and led to a pronounced global rates rally. Yet both the central banks’ dovishness and the lower rates themselves appear to have exacerbated growth concerns. The inversion of the U.S. yield curve (albeit brief and partial) and the lowering of official growth and inflation forecasts by the Fed and the ECB seemed to support the perceived inevitability of a continued slowdown. Intriguingly, many areas of the market still appear to be pricing in a severe slowdown or recession (e.g. U.S. banks, short-end bonds, many cyclical stocks, and certain areas of the Eurozone and Japanese equity market).

Managing Director
Head of Global Multi-Asset Team

1 MSIM Global Multi-Asset Team analysis; Bloomberg, December 25, 2018 to March 31, 2019.
2 MSIM Global Multi-Asset Team analysis; EPFR Global.

The views and opinions are those of the author as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

This general communication, which is not impartial, is for informational and educational purposes only, not a recommendation. Information does not address financial objectives, situation or specific needs of individual investors.

Any charts and graphs provided are for illustrative purposes only. Any performance quoted represents past performance. Past performance does not guarantee future results. All investments involve risks, including the possible loss of principal.

Prior to making any investment decision, investors should carefully review the strategy’s / product’s relevant offering document. For the complete content and important disclosures, refer to the link above.


It is important that users read the Terms of Use before proceeding as it explains certain legal and regulatory restrictions applicable to the dissemination of information pertaining to Morgan Stanley Investment Management's investment products.

The services described on this website may not be available in all jurisdictions or to all persons. For further details, please see our Terms of Use.

Not FDIC Insured—Offer No Bank Guarantee—May Lose Value
Not Insured By Any Federal Government Agency—Not A Deposit

Privacy & Cookies    •    Terms of Use

©  Morgan Stanley. All rights reserved.

Morgan Stanley Distribution, Inc. Member FINRA/SIPC.