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Morgan Stanley Says Go Risk-On and ‘Trust the Recovery’ in 2021

  • Strategists recommend overweighting equities, credit
  • Report suggests selling U.S. dollar, sees volatility falling

Morgan Stanley strategists said an expected “V-shaped” economic recovery, greater clarity on Covid-19 vaccines and continued policy support offer a favorable environment for stocks and credit next year.

In an outlook for 2021, a team including Andrew Sheets recommended investors overweight equities and corporate bonds against cash and government debt, and sell the U.S. dollar. Volatility is set to decline, and investors should be “patient” in commodity markets, the strategists said.