Morgan Stanley Outlook 2015

Morgan Stanley published couple a days ago an investment strategy outlook for 2015:

• 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.

The graph below sums it up nicely:

MS Cross Asset Allocation 

Personally, I would be a bit more carefull. High valuations can cause easily accidents, and be neutral on US stocks!