Displaying items by tag: Morgan Stanley

Friday, 29 June 2018 09:38

The “Rolling” Bear Market

(New York)

This might be a unique kind of bear market we have on our hands, at least according to Morgan Stanley. The bank’s chief US equity strategist says that this is a “kind of rolling bear market”. Continuing “We are not seeing an ’08 scenario where everything gets hit at once … it’s selectively hitting markets one by one and it’s a rolling sort of correction”. Since that seems to be the case, one good defensive sector to avoid turmoil might be US small caps, which are shielded from trade war and are benefiting from last year’s tax cuts.


FINSUM: We like this description of the kind of correction we are currently in. It might not be a single cataclysmic event that sends the market tumbling, but a series of blows that drives things down continuously.

Published in Eq: Large Cap
Monday, 25 June 2018 09:07

Morgan Stanley Says Yields Have Peaked

(New York)

Many investors are worried about rising yields, which could wreak havoc on everything from the economy, to income stocks, to all manner of bonds. Well, for what it is worth, Morgan Stanley has just put out a piece arguing that the 3.12% yield seen on the ten-year Treasury recently is it, the peak. Morgan Stanley says that yields will stop rising and they are advising clients to go long Treasury bonds at current yields. The argument stands in contrast to Pimco and JP Morgan, who both see yields moving towards 4%. The one caveat to the call is if trade tensions get settled quickly, as turmoil on that front is one of the bullish drivers they see for Treasuries.


FINSUM: If trade tensions keep flaring we agree that Treasury yields are likely to stay flat or fall as investors flee to safety.

Published in Bonds: Total Market
Thursday, 31 May 2018 08:40

Morgan Stanley Says No Crisis Coming

(New York)

In an unusually blunt, but refreshing statement, Morgan Stanley put out a statement today calling George Soros’ warning of a financial crisis “ridiculous”. Morgan Stanley CEO James Gorman said while some of Soros’ concerns are warranted, others are not. For instance, Gorman said about Soros’ view of the EU that “I don’t think we are facing an existential threat at all”.


FINSUM: Gorman doesn’t know much about Europe if he does not think it is facing an existential crisis. It very well may not break up (we do not think it will), but it is certainly facing a reckoning about its own meaning and the value of being a member.

Published in Macro

(New York)

Morgan Stanley is a world leader in wealth management, but its asset management unit has long left something to be desired. It first sold off the arm after the Crisis, but has been building a new one since. The firm currently has $469 bn under management, paltry compared to Goldman Sachs and JP Morgan, both of which has over $1 tn. However, CEO James Gorman says one of his seven year goals is to reach $1 tn. The area is a priority for the firm and according to Gorman “one of the most important growth vehicles we have as a firm right now. I’m very excited about it”.


FINSUM: We imagine there would be a lot of synergistic growth between the wealth and asset management businesses, which would be great for the firm. Additionally, asset management is a capital light business that boosts ROI, which both investors and management love.

Published in Wealth Management

(New York)

Morgan Stanley has just put out a very bold prediction. The investment bank has picked a stock which it says will have a $1 tn market cap within a year. That stock is Microsoft. The stock current has a cap of around $740 bn and has risen more than 40% in the last year. But the big catalyst for a move higher is the success of its cloud computing division, Azure. Morgan Stanley summarizes its view this way, saying “Revenue drivers including Azure (Microsoft emerging as a public cloud winner), data center (share gains and positive pricing trends), Office 365 (base growth and per user pricing lift) and the integration of LinkedIn should drive durable double-digit revenue growth over the next three years”.


FINSUM: While bullish, this does not seem at all unlikely.

Published in Eq: Large Cap
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