Buy these stocks? Morgan Stanley favors financial and health care sectors
According to Morgan Stanley's latest views, we can find that:
They are worried about the Fed's tightening of monetary policy andpessimistic about the outlook for US stocks in 2022.
In terms of industry and style, they recommended to large-cap stocks and defensive sectors, especially financials, health care and real estate investment trusts.
The supply chain would be improved next year, and they select the "core" companies in the supply chain, especially semiconductor firms exposed to autos and industrials.
1st interest rate hikes to Sep. 2022, technology and optimal consumption couldn't perform well
Morgan Stanley has pushed forward the timing for the first U.S. Federal Reserve interest rate hike to September 2022, two quarters earlier than its previous forecast, citing the central bank's more guarded stance on inflation.
Morgan Stanley says the US stock market, technology sector and non-essential consumer sector performed strongly before raising interest rates, but did not perform well after raising interest rates. The dollar index remained strong during the first rate hike, but weakened in the months after the rate hikes. Copper and Brent crude oil were stronger, while gold was weaker, especially before interest rates were raised.
Time to lighten up on U.S. stocks and focus on defensive sectors in 2022
Strategists think the S&P 500 index could decline 5% in 2022 while other developed markets could end the year higher. They recommend underweighting U.S. stocks to account for high valuations and more catch-up potential and less volatility elsewhere in the world.
Morgan Stanley has pushed forward the timing for the first U.S. Federal Reserve interest rate hike to September 2022, two quarters earlier than its previous forecast, citing the central bank's more guarded stance on inflation.
Morgan Stanley says the US stock market, technology sector and non-essential consumer sector performed strongly before raising interest rates, but did not perform well after raising interest rates. The dollar index remained strong during the first rate hike, but weakened in the months after the rate hikes. Copper and Brent crude oil were stronger, while gold was weaker, especially before interest rates were raised.
Time to lighten up on U.S. stocks and focus on defensive sectors in 2022
Strategists think the S&P 500 index could decline 5% in 2022 while other developed markets could end the year higher. They recommend underweighting U.S. stocks to account for high valuations and more catch-up potential and less volatility elsewhere in the world.
Given the much higher valuations of growth stocks, they will be more vulnerable to this tightening than defensive stocks. Morgan Stanley continues to be bullish on sectors such as finance, health care and real estate investment trusts.
Pick 'regional champions' and stocks most pressured by the supply chain crisis
According to CNBC, Morgan Stanley said most acute supply chain disruptions are already easing and will be more fully resolved within the first half of 2022.
The investment firm identified companies it says are "regional champions," "recognizing their importance to supply chains and the role that policymakers may play … to support their position against competitive pressures from other spheres of influence."
These are the top stocks that Morgan Stanley says are most "central" to supply chains.
According to CNBC, Morgan Stanley said most acute supply chain disruptions are already easing and will be more fully resolved within the first half of 2022.
The investment firm identified companies it says are "regional champions," "recognizing their importance to supply chains and the role that policymakers may play … to support their position against competitive pressures from other spheres of influence."
These are the top stocks that Morgan Stanley says are most "central" to supply chains.
Tech hardware: $Apple (AAPL.US)$ , HP, Cisco, Lenovo, Fujitsu, Hitachi
Semiconductors: Samsung Electronics, Intel, Infineon Technologies, $NVIDIA (NVDA.US)$
Autos and components: Volkswagen, Ford Motor, Daimler, General Motors, BMW, Tata Motors, Renault, Hyundai Motor, Continental
Software: Microsoft, IBM, Dell, SAP
Insurance: $Berkshire Hathaway-B (BRK.B.US)$
Consumer: Sony, Panasonic, LG Electronics
Retail: Amazon
Capital goods: Volvo AB, Siemens
These are the stocks that fall under the "bottleneck" category.
Semiconductors: Infineon, ST Microelectronics, NXP Semiconductor, Microchip Technology, Texas Instruments, Analog Device, ON Semiconductor, Globalfoundries, Nuvoton Technology, Nanya Technology
Tech hardware: BYD Electronics, Wingtech Technology, Unimicron, Kinsus Interconnect Tech, Nan Ya PCB
Networking equipment: Lumentum, II-VI, Corning, CommScope
"In the face of disruptions and capacity constraints, there are limited options except to raise prices to compensate for higher input costs or to ration capacity through backlogs," Morgan Stanley said, of such firms facing bottlenecks.
$Nasdaq Composite Index (.IXIC.US)$ $S&P 500 Index (.SPX.US)$ $Invesco QQQ Trust (QQQ.US)$
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Do you agree with Morgan Stanley? What sectors do you prefer for 2022?
$Nasdaq Composite Index (.IXIC.US)$ $S&P 500 Index (.SPX.US)$ $Invesco QQQ Trust (QQQ.US)$
Do you agree with Morgan Stanley? What sectors do you prefer for 2022?
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hgar : i have already moved out of almost every US stock except Ford. valuations are outrageous even for the companies that dropped a bit from their highs like Paypal
Dino 64 : I think we are headed for a rough first quarter. Waiting to see what Mondays opening numbers are. I think people are really unsure of the state of global health , in January I feel we will know for sure which way it will go, whether we are atarting to recover or going into a hard winter of shutdowns and isolation.
Molly wealth talk OP Dino 64 : I am not sure should we be so pessimistic /(ㄒoㄒ)/
Molly wealth talk OP hgar : Why you keep confidence in Ford? Sometimes, the market can tolerate high valuation
hgar Molly wealth talk OP : ford has only just started producing or rolling out some of their most popular vehicles in years, the bronco, electric f-150 and maverick. they sold out all presales. they are starting to trade like an EV company while having a much more modest valuation than things like rivian, nio, tesla, etc
Molly wealth talk OP hgar :
hgar Molly wealth talk OP : the timing of my comment couldn't have been better![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
ford up 9.9% today