Morgan Stanley says a quality bias should continue to do well By
2024-06-11 00:20:06

Morgan Stanley analysts believe a focus on high-quality stocks (quality bias) will continue to be a successful investment strategy.

They point to mixed economic data, with positive signs in consumer spending and the services sector but also concerns about inflation.

This uncertainty, according to Morgan Stanley, reinforces their view of favoring "quality growth and quality cyclicals with some defensive exposure."

The note highlights the underperformance of small-cap stocks compared to large-cap counterparts. Morgan Stanley reasons that small caps are more sensitive to interest rates, and while higher rates are a clear negative, they don't see significant benefits for small caps from potential rate cuts. This is a key reason they favor large-cap stocks.

Encouragingly, Morgan Stanley observes a reacceleration of earnings growth, particularly within large-cap, high-quality stocks. This trend, following a period of stagnation, coincides with recent loosening of financial conditions and revised, lower growth expectations.

With the economic outlook remaining unclear, Morgan Stanley recommends a "large cap quality bias" for investors. This strategy incorporates exposure to different market segments, including growth stocks, cyclical stocks, and defensive plays, to navigate the uncertain late-cycle environment.

The content of this article does not represent the views of fxgecko website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!

Related News

您正在访问的是FxGecko网站。 FxGecko互联网及其移动端产品是中国香港特别行政区成立的Hitorank Co.,LIMITED旗下运营和管理的一款面向全球发行的企业资讯査询工具。

您的IP为 中国大陆地区,抱歉的通知您,不能为您提供查询服务,还请谅解。请遵守当地地法律。