Displaying items by tag: Morgan Stanley

(New York)

Morgan Stanley has just put out a warning, or perhaps better stated, a notice to investors. The bank is reminding the market that this year will likely have the lowest returns in a decade. The bank’s strategists say that “2018 is on track to have the lowest share of positive returns adjusted for inflation across 17 major asset classes since 2008”. The poor returns have been particularly true for those holding globally diversified portfolios. What’s worse, Morgan Stanley thinks returns are going to get worse because of rising rates. According to the bank “We’re big believers that real rates matter most for risk markets, as it’s the rate over and above inflation that matters most for discounting future cash flows … As ‘invincible’ as the U.S. equity market has been, it hasn’t had to confront a different rate regime”.


FINSUM: If you look internationally, this has been a terrible year for markets, and it does seem true that rising rates won’t help anything in the coming year.

Published in Eq: Total Market
Tuesday, 28 August 2018 08:48

Wealth Management Recruiting Ramping Up

(New York)

Since the end of the Broker Protocol, it seems that many firms have shied away from recruiting. Especially at the senior level, but even at the junior level, firms have not been investing as much in recruiting. But that may be starting to change, as recent reports of increased recruiting activity have emerged, such as word today that Edward Jones is ramping it up. Edward Jones says it aims to hire 250 senior advisors from other firms this year. Additionally, there is some news out that Morgan Stanley and Merrill Lynch may be working on a so-called Broker Protocol 2.0.


FINSUM: This seems an encouraging sign on the recruiting front after a rough year. FYI Edward Jones is not part of the Broker Protocol.

Published in Wealth Management
Friday, 24 August 2018 10:02

Morgan Stanley is Buying Two Small Cap Stocks

(New York)

Morgan Stanley disclosed this week that it has upped its holdings in two small stocks to above 5%. While one can get a lot of info (however biased) from equity research divisions, there is nothing like seeing what banks are actually buying themselves. In this case, the two stocks are Electronics for Imaging, and Turtle Beach. The former is a digital imaging firm whose shares have been rising this year, and the latter is a gaming headset maker who shares have risen 15x this year, but is still only worth $392m.


FINSUM: Gaming headsets seem like a good growth area at the moment, but are probably outside the skillset of most investors to judge.

Published in Eq: Large Cap
Thursday, 09 August 2018 09:23

Morgan Stanley Warns on Critical Sector

(New York)

In what seems like a series of warnings out of Morgan Stanley, the bank has put out another today on a critical sector. MS says that the market darling chip sector, often referred to as semi-conductors, are in for a rough road. The bank says the sector has the poorest risk-reward ratio in years. “Cyclical indicators are flashing red … Elevated inventory and stretched lead times leave no margin for error as any lead time adjustment or demand slowdown could drive a meaningful correction”, says the bank.


FINSUM: Gains of semiconductors have greatly outpaced the market over the last three years, and MS thinks it is all about to come crashing down.

Published in Eq: Large Cap

(New York)

Just a day after Citi and Goldman Sachs warned of a market correction, Morgan Stanley has gone on the record with an even more stark warning. The bank says that an even stronger correction than February is looming and that the selloff is is imminent and has “just begun”. MS says that we are in the midst of a “rolling bear market”, and that almost every sector has been de-rated. Investors are unprepared for the big losses in tech, and the market has little to look forward to. Morgan Stanley says the drop will be bigger than earlier this year “if it’s centered on Tech, Consumer Discretionary, and small caps, as we expect”.


FINSUM: This is an even more stern warning than what we ran yesterday, and more specific too. Tech is already having a meltdown, but what really caught our eye was the threat to small caps, which have been on a great run.

Published in Eq: Large Cap
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