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00:00FOR A WHILE. DAVID: HE HAS HAD VIEWS ON INTEREST RATES FOR QUITE SOME TIME NOW. [LAUGHTER] GUY: ABSOLUTELY, YES TALKED ABOUT IT FOR AGES. DAVID: THANK YOU SO MUCH FOR SHARING WITH US. THAT WAS GUY JOHNSON IN LONDON. NOW WE ARE JOINED BY LISA SHALETT. GIVE US YOUR REACTION. LISA: SOMEWHAT UNCONVENTIONAL AS TERMS OF RHETORIC BUT THIS HAS BEEN IN THE AIR FOR A WHILE. I THINK WE KNOW WHERE HE IS GOING WITH THIS. THE BOTTOM LINE, FROM WHERE WE SIT IS THAT WHAT IS GOING ON IN EMERGING MARKETS WRONGFULLY IS REALLY ABOUT THE GLOBAL RECOVERY , IT CONTINUES TO BE, WE GOT WEAKER DATA OUT OF CHINA TODAY FROM THE RETAIL SALES THAT LAST WEEK WE GOT AT HER THAN EXPECTED DATA OUT OF CHINA ON TRADE. IMPORTS AND EXPORTS. AND WE THINK THAT IS WHAT REALLY IS POWERING TM. -- POWERING EM. ALIX: WHAT HAS -- JULIA: WHAT HAS CHANGED THE GAME? OF UNTIL A MONTH AGO, PEOPLE WERE SAYING IT WAS DIFFERENT. NOW, SUDDENLY, EVERYONE IS GOING WELL, THE DOLLAR COULD BE A PROBLEM HERE. YOU THINK THE DOLLAR IS OVERVALUED? LISA: WE DO. WE DON ' T THINK THIS TECHNICAL CORRECTION OR RALLY THAT THE DOLLAR HAS HAD IS GOING TO BE SUSTAINED. AS YOU KNOW, WE HAVE GONE THROUGH THIS TIME IN 2014 AND 2015 WHERE THE DOLLAR APPRECIATED BY AS MUCH AS 25%. AND CURRENCY MARKETS TEND TO OVERSHOOT. OUR SENSE IS THAT WE ARE GOING INTO A TREND. COMBINED WITH HIGHER INFLATION, IT WILL PUT DOWNWARD PRESSURE ON THE U.S. DOLLAR AND IT ALREADY WAS ON A PARITY BASIS OF 15%-10% OVERVALUED. DAVID: WE ARE TOLD THAT EM IS DIFFERENT THIS TIME. YOU SUPPLIED A CHART TO TRACK EM EQUITIES. EXPLAIN TO US WHAT THIS WAS? IT IS NOT ABOUT COMMODITIES.

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Morgan Stanley's Shalett Says Broader EM Is a Good Place to Invest

Lisa Shalett, head of investment and portfolio management at Morgan Stanley Wealth Management, discusses the outlook for emerging markets and her thoughts on investing. She speaks with David Westin and Julia Chatterley on "Bloomberg Daybreak: Americas." (Source: Bloomberg)

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