Eq: Total Market

High levels of unemployment continue to plague the labor market despite available jobs...See More

President Biden renominated Jerome Powell as Fed Chair on Monday this week in perhaps the purest bi-partisan reaction from the President since he entered office. The news was celebrated on wall street as both the bond and equity markets felt the reprieve. Additionally, Republicans on the senate banking committee rejoiced at the pick given Powell’s historical ties to the republican party. Powell was assumed to be in a close contest for the Fed position with Lael Brainard, but ultimately continuity was valued moving into the next phase of the post-covid recession. Still Powell’s road is difficult moving forward given sluggish employment and growth, and rising inflationary pressures.


FINSUM: This was a wise decision by Biden politically, and markets trust Powell to be dovish even as a republican which is the best of both worlds for the economy.

In their latest strategy release Morgan Stanley is pulling no punches about its projections for 2022, warning investors to unload and underweight U.S. Stocks, Bonds and Treasuries. They see tightening monetary policy, high inflation, and higher valuations all scaring them from a more bullish U.S. stance. They see the S&P dropping to almost 6% below its current levels. In order to find the gains they need they suggest investors look to Euro-area and Japanese companies, where they are bullish on equity prices. They also see commodities providing some portfolio relief. However, Morgan Stanley’s economists aren’t predicting a rate rise until 2023, and they see the Fed being more dovish than the broader market expects.


FINSUM: Conflicting messages inside Morgan Stanley. If Monetary Policy doesn’t over tighten then don’t expect a sluggish year in the U.S.

Page 6 of 88

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…