- The Cycle Has Further to Go: Improving growth, bottoming inflation and supportive central banks are supportive for risky asset classes. They do not see a problem with high valuation in contrast to James Motier of GMO.
- And consequently, they argue "Equities: It Ain’t a Bubble Yet".
- They prefer developed equities over emerging equities. This is in contrast to other researcher who argue that Asia is cheaper than the US, and hence has to outperform.
- FX: significant USD gains.
- Underperformance of long treasury bonds of developed governments because their yield is on a historic low.
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| MS Cross Asset Allocation |
Personally, I would be a bit more carefull. High valuations can cause easily accidents, and be neutral on US stocks!
