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Recovery rally has further to run, so buy stocks: Morgan Stanley

EconomyJun 15, 2020 02:00AM ET
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© Reuters. A woman takes photos by the Morgan Stanley building in Times Square in New York

SINGAPORE (Reuters) - Stock market gains have further to run and investors are still under-pricing the scale of the world's coronavirus recovery, investment bank Morgan Stanley (N:MS) said in an outlook note.

"While the last four months have been exceptional, we think that this cycle has been, and will be, more 'normal' than appreciated," said Andrew Sheets, the bank's chief cross-asset strategist.

"We think that stocks and credit will be modestly higher and tighter over the next 12 months," he said. The bank forecasts the S&P 500 index at 3,350 points and benchmark U.S. 10-year yields at 1.3% by mid-2021.

The call, made in a note dated Sunday and distributed on Monday, comes as global markets pull back from a sharp rally that has lifted world stocks about 36% from March lows.

The S&P 500 (SPX) closed at 3,041.31 points on Friday and U.S. 10-year yields (US10YT=RR) last sat at 0.6625%.

Morgan Stanley analysts suggest clients take long positions in U.S. small caps and financials, the euro and emerging market currencies, such as the Indonesian rupiah and Indian rupee, and add a little bit more risk to their credit portfolios.

"We recommend a broad rotation into cyclicals and value across global equities."

 

Recovery rally has further to run, so buy stocks: Morgan Stanley
 

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Comments (6)
left behind
left behind Jun 15, 2020 5:45AM ET
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3350 in another year? we were as t 3200 already in June. -- "We think that stocks and credit will be modestly higher and tighter over the next 12 months," he said. The bank forecasts the S&P 500 index at 3,350 points and benchmark U.S. 10-year yields at 1.3% by mid-2021
Rehoboam IO
Rehoboam Jun 15, 2020 3:33AM ET
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If anyone now has ever harbored a doubt as to whether the banks manipulate retail traders and investors, doubt no more.
Pamp da Stonks
Pamp da Stonks Jun 15, 2020 2:55AM ET
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Now we know who is rigging
Elephan Mann
Elephan Mann Jun 15, 2020 2:36AM ET
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Morgan Stanley: Buy more so we can take your money please.
Pól Hansen
Pól Hansen Jun 15, 2020 2:09AM ET
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Hunt Richardson
Hunt Richardson Jun 15, 2020 2:02AM ET
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whoever wrote this must be out of their mind while covid cases rise again in the US and China
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David Ganser
David Ganser Jun 15, 2020 2:02AM ET
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s&p futures down almost 3% in asian trading monday
Pól Hansen
Pól Hansen Jun 15, 2020 2:02AM ET
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Agree totaly BS
Carlos Escobar
SELLxTHExTOP Jun 15, 2020 2:02AM ET
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You must be new at trading, isn't it?
Viktor Veselý
Viktor Veselý Jun 15, 2020 2:02AM ET
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USA covid numbers decreasing every day, China increase of 49 which is nothing. Why are you spreading panick and lies?  https://www.worldometers.info/coronavirus/country/us/ https://www.worldometers.info/coronavirus/country/china/
John Thompson
John Thompson Jun 15, 2020 2:02AM ET
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Beijing gone back into lockdown vs US that doesnt care about saving lives only DJ
 
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