Morgan Stanley Turns Bearish on Global Stocks as Challenges Grow
- Lowest allocation to equities in at least five years: MS
- Elevated valuations and profit headwinds among the concerns
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Morgan Stanley cut its global equities allocation to the lowest in five years, and downgraded its investment recommendation to underweight, saying the outlook for stocks over the next three months looks particularly poor.
Profit forecasts remain too optimistic, as measures of manufacturing health around the world keep deteriorating, strategists including Andrew Sheets wrote in a note Sunday. Expectations for looser central bank policy are high, leaving little to boost already elevated equity prices, they said.