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2021-05-24

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Morgan Stanley: Here Are The 4 "Worries" That Will Dominate The Next 6-12 Months<blockquote>摩根士丹利：以下是未来 6-12 个月将主导的 4 个“担忧”</blockquote>

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":131035233,"tweetId":"131035233","gmtCreate":1621815941422,"gmtModify":1634186451988,"author":{"id":3584509994449737,"idStr":"3584509994449737","authorId":3584509994449737,"authorIdStr":"3584509994449737","name":"Jeremiahsay","avatar":"https://static.tigerbbs.com/728d5f6ebabd134a86ea0e208fea530d","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"wearingBadges":[],"fanSize":4,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","extraTitle":"","html":"<html><head></head><body>&nbsp;Commented</body></html>","htmlText":"<html><head></head><body>&nbsp;Commented</body></html>","text":"Commented","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":2,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/131035233","repostId":1196215338,"repostType":4,"repost":{"id":"1196215338","kind":"news","pubTimestamp":1621815461,"share":"https://www.laohu8.com/m/news/1196215338?lang=zh_CN&edition=full","pubTime":"2021-05-24 08:17","market":"us","language":"en","title":"Morgan Stanley: Here Are The 4 \"Worries\" That Will Dominate The Next 6-12 Months<blockquote>摩根士丹利：以下是未来 6-12 个月将主导的 4 个“担忧”</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1196215338","media":"zerohedge","summary":"By Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley\nAll Gas, No Brakes\nThe weather in ","content":"By Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley<blockquote>作者：Andrew Sheets，摩根士丹利首席跨资产策略师</blockquote> All Gas, No Brakes<blockquote>全油门，无刹车</blockquote> The weather in London this week has been rainy&nbsp;while&nbsp;sunny, which feels like a fair description of current sentiment, as we’ve been discussing our mid-year outlook with investors this week. There’s a&nbsp;wide&nbsp;range of views out there at the moment, with the noisiness of the data giving everyone something to hang their hat on. In short, it’s the perfect time to step back and debate the longer-term outlook.<blockquote>这个星期伦敦的天气一直下雨当本周我们一直在与投资者讨论年中展望，阳光明媚，这似乎是对当前情绪的公平描述。有一个广泛的目前外面的视野范围很广，数据的噪音给了每个人一些悬挂帽子的东西。简而言之，现在是退后一步，讨论长期前景的最佳时机。</blockquote> The most notable aspect of our forecasts, and one of the most contentious areas of debate, is just how much&nbsp;our expectations differ from the prior decade.&nbsp;The post-GFC period was defined by fiscal austerity,&nbsp;low&nbsp;investment, a deleveraging consumer and central banks acting&nbsp;pre-emptively&nbsp;to choke off inflationary risk. Indeed,for all that we associate ‘easy policy’ with the last cycle, the PBOC tightening in 2010, the ECB hiking in 2011 and the Fed hiking in 2015 were all aggressive&nbsp;early&nbsp;moves to nip inflation in the bud.<blockquote>我们的预测中最引人注目的方面，也是最有争议的辩论领域之一，就是我们的预期与前十年有多大不同。后GFC时期的定义是财政紧缩，低的投资、去杠杆化的消费者和央行的行动抢先一步抑制通货膨胀风险。的确，尽管我们将“宽松政策”与上一个周期联系在一起，但2010年中国人民银行的紧缩政策、2011年欧洲央行的加息政策和2015年美联储的加息政策都是激进的。早期的将通货膨胀扼杀在萌芽状态。</blockquote> Our expectations this time around couldn’t be more different.Fiscal policy is historically expansionary. The consumer in the US, Europe and China is in outstanding shape, with record levels of savings. We see a ‘red-hot capex cycle’ and public and private sector investment increasing. Global real rates are still near all-time lows. As my colleague Chetan Ahya noted in last week’s&nbsp;Sunday Start,fiscal easing, cheap money, a strong consumer and more investment are four powerful cylinders in the proverbial economic engine.<blockquote>这一次，我们的期望大不相同。财政政策历来是扩张性的。美国、欧洲和中国的消费者状况良好，储蓄水平创历史新高。我们看到了一个 “火热的资本支出周期”，公共和私营部门的投资都在增加。全球实际利率仍接近历史低点。正如我的同事 Chetan Ahya 在上周的周日开始,财政宽松、廉价货币、强劲的消费者和更多的投资是众所周知的经济引擎中的四个强大气缸。</blockquote> But just as notable is the expected policy response. In the face of strong growth, we think that central banks remain unusually standoffish. For the Fed, it’s a focus on still-elevated unemployment, coupled with a recent commitment to average inflation targeting. For the ECB, it’s awareness of a long-running inflation undershoot and memories of the 2011 hikes. For China, it’s taking a more gradual approach to tightening than after the last downturn.<blockquote>但同样值得注意的是预期的政策反应。面对强劲的增长，我们认为各国央行仍然异常冷漠。对美联储来说，这是对仍然居高不下的失业率的关注，再加上最近对平均通胀目标的承诺。对欧洲央行来说，这是对长期通胀低迷的认识，也是对 2011 年加息的记忆。对中国来说，与上次经济衰退后相比，中国正在采取更加渐进的紧缩政策。</blockquote> In short, it’s a global economy with a lot of gas and few brakes:And if that is so, it means the risk case is different. After a decade where risk often skewed to the downside and the question was what new form of easing would central banks conjure up to fight weakness, the issue now is that growth is&nbsp;good. Hence:<blockquote>简而言之，这是一个汽油多、刹车少的全球经济：如果是这样的话，这意味着风险情况是不同的。在过去的十年里，风险经常向下行倾斜，问题是各国央行将采取何种新形式的宽松政策来对抗疲软，但现在的问题是，经济增长好的.因此:</blockquote> <ol> <li>Will the recovery create inflation?<blockquote><ol><li>复苏会造成通货膨胀吗？</li></ol></blockquote></li> <li>Will it alter central bank policy?<blockquote><li>会改变央行政策吗？</li></blockquote></li> <li>Will that lead to margin and tax pressures?<blockquote><li>这会导致利润和税收压力吗？</li></blockquote></li> <li>And is good growth already in the price?<blockquote><li>良好的增长已经在价格中了吗？</li></blockquote></li> </ol> If&nbsp;these are the ‘worries’ that will dominate the next 6-12 months, they won’t apply evenly. For US equities and credit, as well as segments of EM, these concerns will be front and center. But for Europe (and Japan), the questions of excessive valuations, high inflation, a hawkish policy shift or new corporate taxes seem much more distant. Maybe this distinction is obvious, but we think that it still works to Europe’s advantage.<blockquote>如果这些 “担忧 ”将在未来 6-12 个月内占据主导地位，但它们不会均匀适用。对于美国股票和信贷以及新兴市场的细分市场来说，这些担忧将是前沿和中心。但对于欧洲（和日本）来说，估值过高、高通胀、鹰派政策转变或新企业税等问题似乎更加遥远。也许这种区别是显而易见的，但我们认为它仍然对欧洲有利。</blockquote> A hotter cycle could also mean a&nbsp;shorter&nbsp;cycle, and an unusually fast normalization of conditions. Such a scenario disadvantages credit. The asset class sees outstanding early-cycle, post-recession performance as growth recovers and companies focus on survival. But as things heat up, extra growth doesn’t mean any extra income from a corporate bond. On a cross-asset basis, credit underperforms on our new 12-month forecasts, and credit risk premiums look rich relative to other assets.With a change in view from Srikanth Sankaran and our credit strategy team,&nbsp;we’ve downgraded credit&nbsp;to equal-weight.<blockquote>更热的周期也可能意味着更短周期，以及异常快速的条件正常化。这种情况不利于信用。随着增长复苏和公司专注于生存，该资产类别在经济衰退后的早期周期表现出色。但随着事态升温，额外的增长并不意味着公司债券的额外收入。在跨资产基础上，信贷表现不如我们新的 12 个月预测，而且相对于其他资产，信用风险溢价看起来很高。鉴于斯里坎特-桑卡兰（Srikanth Sankaran）和我们的信用战略团队做出了改变，我们已将信用评级下调至同等权重。</blockquote> Finally, these forecasts invite an even more important&nbsp;structural&nbsp;question. Again, our expectations for strong fiscal, monetary and capital spending and consumer trends are&nbsp;very&nbsp;different from what prevailed over the last decade.Will this mean an exit from the secular stagnation of the post-GFC mindset? If we are right, this should be an increasingly important debate.<blockquote>最后，这些预测引发了一个更重要的结构上的问题。同样，我们对强劲的财政、货币和资本支出以及消费趋势的预期是非常不同于过去十年的情况。这是否意味着摆脱后GFC思维模式的长期停滞？如果我们是对的，这应该是一场越来越重要的辩论。</blockquote> As we’ve told this story over the last week, opinions, like the weather, have been mixed. We’ve talked to plenty of investors who think it’s finally Europe’s time to shine, and plenty of others who worry it will remain a serial disappointment.One investor described our expectation that the Fed doesn’t hike until 3Q23 as ‘what the Fed wants to do, not what it will do’, while another thought the Fed wouldn’t be able to complete tapering, given market sensitivity to real rates.<blockquote>在过去一周的报道中，人们的看法和天气一样，褒贬不一。我们与许多投资者进行了交谈，他们认为欧洲终于到了大放异彩的时候了，也有很多投资者担心欧洲仍将令人失望。一位投资者将我们对美联储在2023年第三季度之前不会加息的预期描述为 “美联储想做什么，而不是它将要做什么”，而另一位投资者则认为，鉴于市场对实际利率的敏感性，美联储将无法完成缩减加息规模。</blockquote> Opinion on the big picture is similarly divided.Indeed, the current debate reminds me quite a bit of 2010, when there was a sharp division between those who expected a rapid return of pre-crisis conditions (higher rates, EM leadership), and those who thought otherwise.As growth and inflation pick up, we expect a trickier summer, but also an ongoing debate around these larger issues. Rain during sunshine could be something we need to get used to.<blockquote>对大局的看法也有类似的分歧。事实上，当前的辩论让我想起了2010年，当时预计危机前状况（更高的利率、新兴市场领导地位）会迅速恢复的人和不这么认为的人之间存在着尖锐的分歧。随着增长和通胀的回升，我们预计夏季将更加棘手，但围绕这些更大问题的辩论也将持续进行。阳光下的雨可能是我们需要习惯的。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Morgan Stanley: Here Are The 4 \"Worries\" That Will Dominate The Next 6-12 Months<blockquote>摩根士丹利：以下是未来 6-12 个月将主导的 4 个“担忧”</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMorgan Stanley: Here Are The 4 \"Worries\" That Will Dominate The Next 6-12 Months<blockquote>摩根士丹利：以下是未来 6-12 个月将主导的 4 个“担忧”</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nzerohedge2021-05-24 08:17\n\n</h4>\n</header>\n<article>\nBy Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley<blockquote>作者：Andrew Sheets，摩根士丹利首席跨资产策略师</blockquote> All Gas, No Brakes<blockquote>全油门，无刹车</blockquote> The weather in London this week has been rainy&nbsp;while&nbsp;sunny, which feels like a fair description of current sentiment, as we’ve been discussing our mid-year outlook with investors this week. There’s a&nbsp;wide&nbsp;range of views out there at the moment, with the noisiness of the data giving everyone something to hang their hat on. In short, it’s the perfect time to step back and debate the longer-term outlook.<blockquote>这个星期伦敦的天气一直下雨当本周我们一直在与投资者讨论年中展望，阳光明媚，这似乎是对当前情绪的公平描述。有一个广泛的目前外面的视野范围很广，数据的噪音给了每个人一些悬挂帽子的东西。简而言之，现在是退后一步，讨论长期前景的最佳时机。</blockquote> The most notable aspect of our forecasts, and one of the most contentious areas of debate, is just how much&nbsp;our expectations differ from the prior decade.&nbsp;The post-GFC period was defined by fiscal austerity,&nbsp;low&nbsp;investment, a deleveraging consumer and central banks acting&nbsp;pre-emptively&nbsp;to choke off inflationary risk. Indeed,for all that we associate ‘easy policy’ with the last cycle, the PBOC tightening in 2010, the ECB hiking in 2011 and the Fed hiking in 2015 were all aggressive&nbsp;early&nbsp;moves to nip inflation in the bud.<blockquote>我们的预测中最引人注目的方面，也是最有争议的辩论领域之一，就是我们的预期与前十年有多大不同。后GFC时期的定义是财政紧缩，低的投资、去杠杆化的消费者和央行的行动抢先一步抑制通货膨胀风险。的确，尽管我们将“宽松政策”与上一个周期联系在一起，但2010年中国人民银行的紧缩政策、2011年欧洲央行的加息政策和2015年美联储的加息政策都是激进的。早期的将通货膨胀扼杀在萌芽状态。</blockquote> Our expectations this time around couldn’t be more different.Fiscal policy is historically expansionary. The consumer in the US, Europe and China is in outstanding shape, with record levels of savings. We see a ‘red-hot capex cycle’ and public and private sector investment increasing. Global real rates are still near all-time lows. As my colleague Chetan Ahya noted in last week’s&nbsp;Sunday Start,fiscal easing, cheap money, a strong consumer and more investment are four powerful cylinders in the proverbial economic engine.<blockquote>这一次，我们的期望大不相同。财政政策历来是扩张性的。美国、欧洲和中国的消费者状况良好，储蓄水平创历史新高。我们看到了一个 “火热的资本支出周期”，公共和私营部门的投资都在增加。全球实际利率仍接近历史低点。正如我的同事 Chetan Ahya 在上周的周日开始,财政宽松、廉价货币、强劲的消费者和更多的投资是众所周知的经济引擎中的四个强大气缸。</blockquote> But just as notable is the expected policy response. In the face of strong growth, we think that central banks remain unusually standoffish. For the Fed, it’s a focus on still-elevated unemployment, coupled with a recent commitment to average inflation targeting. For the ECB, it’s awareness of a long-running inflation undershoot and memories of the 2011 hikes. For China, it’s taking a more gradual approach to tightening than after the last downturn.<blockquote>但同样值得注意的是预期的政策反应。面对强劲的增长，我们认为各国央行仍然异常冷漠。对美联储来说，这是对仍然居高不下的失业率的关注，再加上最近对平均通胀目标的承诺。对欧洲央行来说，这是对长期通胀低迷的认识，也是对 2011 年加息的记忆。对中国来说，与上次经济衰退后相比，中国正在采取更加渐进的紧缩政策。</blockquote> In short, it’s a global economy with a lot of gas and few brakes:And if that is so, it means the risk case is different. After a decade where risk often skewed to the downside and the question was what new form of easing would central banks conjure up to fight weakness, the issue now is that growth is&nbsp;good. Hence:<blockquote>简而言之，这是一个汽油多、刹车少的全球经济：如果是这样的话，这意味着风险情况是不同的。在过去的十年里，风险经常向下行倾斜，问题是各国央行将采取何种新形式的宽松政策来对抗疲软，但现在的问题是，经济增长好的.因此:</blockquote> <ol> <li>Will the recovery create inflation?<blockquote><ol><li>复苏会造成通货膨胀吗？</li></ol></blockquote></li> <li>Will it alter central bank policy?<blockquote><li>会改变央行政策吗？</li></blockquote></li> <li>Will that lead to margin and tax pressures?<blockquote><li>这会导致利润和税收压力吗？</li></blockquote></li> <li>And is good growth already in the price?<blockquote><li>良好的增长已经在价格中了吗？</li></blockquote></li> </ol> If&nbsp;these are the ‘worries’ that will dominate the next 6-12 months, they won’t apply evenly. For US equities and credit, as well as segments of EM, these concerns will be front and center. But for Europe (and Japan), the questions of excessive valuations, high inflation, a hawkish policy shift or new corporate taxes seem much more distant. Maybe this distinction is obvious, but we think that it still works to Europe’s advantage.<blockquote>如果这些 “担忧 ”将在未来 6-12 个月内占据主导地位，但它们不会均匀适用。对于美国股票和信贷以及新兴市场的细分市场来说，这些担忧将是前沿和中心。但对于欧洲（和日本）来说，估值过高、高通胀、鹰派政策转变或新企业税等问题似乎更加遥远。也许这种区别是显而易见的，但我们认为它仍然对欧洲有利。</blockquote> A hotter cycle could also mean a&nbsp;shorter&nbsp;cycle, and an unusually fast normalization of conditions. Such a scenario disadvantages credit. The asset class sees outstanding early-cycle, post-recession performance as growth recovers and companies focus on survival. But as things heat up, extra growth doesn’t mean any extra income from a corporate bond. On a cross-asset basis, credit underperforms on our new 12-month forecasts, and credit risk premiums look rich relative to other assets.With a change in view from Srikanth Sankaran and our credit strategy team,&nbsp;we’ve downgraded credit&nbsp;to equal-weight.<blockquote>更热的周期也可能意味着更短周期，以及异常快速的条件正常化。这种情况不利于信用。随着增长复苏和公司专注于生存，该资产类别在经济衰退后的早期周期表现出色。但随着事态升温，额外的增长并不意味着公司债券的额外收入。在跨资产基础上，信贷表现不如我们新的 12 个月预测，而且相对于其他资产，信用风险溢价看起来很高。鉴于斯里坎特-桑卡兰（Srikanth Sankaran）和我们的信用战略团队做出了改变，我们已将信用评级下调至同等权重。</blockquote> Finally, these forecasts invite an even more important&nbsp;structural&nbsp;question. Again, our expectations for strong fiscal, monetary and capital spending and consumer trends are&nbsp;very&nbsp;different from what prevailed over the last decade.Will this mean an exit from the secular stagnation of the post-GFC mindset? If we are right, this should be an increasingly important debate.<blockquote>最后，这些预测引发了一个更重要的结构上的问题。同样，我们对强劲的财政、货币和资本支出以及消费趋势的预期是非常不同于过去十年的情况。这是否意味着摆脱后GFC思维模式的长期停滞？如果我们是对的，这应该是一场越来越重要的辩论。</blockquote> As we’ve told this story over the last week, opinions, like the weather, have been mixed. We’ve talked to plenty of investors who think it’s finally Europe’s time to shine, and plenty of others who worry it will remain a serial disappointment.One investor described our expectation that the Fed doesn’t hike until 3Q23 as ‘what the Fed wants to do, not what it will do’, while another thought the Fed wouldn’t be able to complete tapering, given market sensitivity to real rates.<blockquote>在过去一周的报道中，人们的看法和天气一样，褒贬不一。我们与许多投资者进行了交谈，他们认为欧洲终于到了大放异彩的时候了，也有很多投资者担心欧洲仍将令人失望。一位投资者将我们对美联储在2023年第三季度之前不会加息的预期描述为 “美联储想做什么，而不是它将要做什么”，而另一位投资者则认为，鉴于市场对实际利率的敏感性，美联储将无法完成缩减加息规模。</blockquote> Opinion on the big picture is similarly divided.Indeed, the current debate reminds me quite a bit of 2010, when there was a sharp division between those who expected a rapid return of pre-crisis conditions (higher rates, EM leadership), and those who thought otherwise.As growth and inflation pick up, we expect a trickier summer, but also an ongoing debate around these larger issues. Rain during sunshine could be something we need to get used to.<blockquote>对大局的看法也有类似的分歧。事实上，当前的辩论让我想起了2010年，当时预计危机前状况（更高的利率、新兴市场领导地位）会迅速恢复的人和不这么认为的人之间存在着尖锐的分歧。随着增长和通胀的回升，我们预计夏季将更加棘手，但围绕这些更大问题的辩论也将持续进行。阳光下的雨可能是我们需要习惯的。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.zerohedge.com/markets/morgan-stanley-here-are-4-worries-will-dominate-next-6-12-months\">zerohedge</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SPY":"标普500ETF",".SPX":"S&P 500 Index",".DJI":"道琼斯",".IXIC":"NASDAQ Composite"},"source_url":"https://www.zerohedge.com/markets/morgan-stanley-here-are-4-worries-will-dominate-next-6-12-months","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1196215338","content_text":"By Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley\nAll Gas, No Brakes\nThe weather in London this week has been rainy while sunny, which feels like a fair description of current sentiment, as we’ve been discussing our mid-year outlook with investors this week. There’s a wide range of views out there at the moment, with the noisiness of the data giving everyone something to hang their hat on. In short, it’s the perfect time to step back and debate the longer-term outlook.\nThe most notable aspect of our forecasts, and one of the most contentious areas of debate, is just how much our expectations differ from the prior decade. The post-GFC period was defined by fiscal austerity, low investment, a deleveraging consumer and central banks acting pre-emptively to choke off inflationary risk. Indeed,for all that we associate ‘easy policy’ with the last cycle, the PBOC tightening in 2010, the ECB hiking in 2011 and the Fed hiking in 2015 were all aggressive early moves to nip inflation in the bud.\nOur expectations this time around couldn’t be more different.Fiscal policy is historically expansionary. The consumer in the US, Europe and China is in outstanding shape, with record levels of savings. We see a ‘red-hot capex cycle’ and public and private sector investment increasing. Global real rates are still near all-time lows. As my colleague Chetan Ahya noted in last week’s Sunday Start,fiscal easing, cheap money, a strong consumer and more investment are four powerful cylinders in the proverbial economic engine.\nBut just as notable is the expected policy response. In the face of strong growth, we think that central banks remain unusually standoffish. For the Fed, it’s a focus on still-elevated unemployment, coupled with a recent commitment to average inflation targeting. For the ECB, it’s awareness of a long-running inflation undershoot and memories of the 2011 hikes. For China, it’s taking a more gradual approach to tightening than after the last downturn.\nIn short, it’s a global economy with a lot of gas and few brakes:And if that is so, it means the risk case is different. After a decade where risk often skewed to the downside and the question was what new form of easing would central banks conjure up to fight weakness, the issue now is that growth is good. Hence:\n\nWill the recovery create inflation?\nWill it alter central bank policy?\nWill that lead to margin and tax pressures?\nAnd is good growth already in the price?\n\nIf these are the ‘worries’ that will dominate the next 6-12 months, they won’t apply evenly. For US equities and credit, as well as segments of EM, these concerns will be front and center. But for Europe (and Japan), the questions of excessive valuations, high inflation, a hawkish policy shift or new corporate taxes seem much more distant. Maybe this distinction is obvious, but we think that it still works to Europe’s advantage.\nA hotter cycle could also mean a shorter cycle, and an unusually fast normalization of conditions. Such a scenario disadvantages credit. The asset class sees outstanding early-cycle, post-recession performance as growth recovers and companies focus on survival. But as things heat up, extra growth doesn’t mean any extra income from a corporate bond. On a cross-asset basis, credit underperforms on our new 12-month forecasts, and credit risk premiums look rich relative to other assets.With a change in view from Srikanth Sankaran and our credit strategy team, we’ve downgraded credit to equal-weight.\nFinally, these forecasts invite an even more important structural question. Again, our expectations for strong fiscal, monetary and capital spending and consumer trends are very different from what prevailed over the last decade.Will this mean an exit from the secular stagnation of the post-GFC mindset? If we are right, this should be an increasingly important debate.\nAs we’ve told this story over the last week, opinions, like the weather, have been mixed. We’ve talked to plenty of investors who think it’s finally Europe’s time to shine, and plenty of others who worry it will remain a serial disappointment.One investor described our expectation that the Fed doesn’t hike until 3Q23 as ‘what the Fed wants to do, not what it will do’, while another thought the Fed wouldn’t be able to complete tapering, given market sensitivity to real rates.\nOpinion on the big picture is similarly divided.Indeed, the current debate reminds me quite a bit of 2010, when there was a sharp division between those who expected a rapid return of pre-crisis conditions (higher rates, EM leadership), and those who thought otherwise.As growth and inflation pick up, we expect a trickier summer, but also an ongoing debate around these larger issues. Rain during sunshine could be something we need to get used to.","news_type":1,"symbols_score_info":{"SPY":0.9,".DJI":0.9,".SPX":0.9,".IXIC":0.9}},"isVote":1,"tweetType":1,"viewCount":1158,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":9,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/131035233"}