Morgan Stanley chief cross-asset strategist Serena Tang says the agency stays constructive on threat property for the remainder of 2026 regardless of rising uncertainty tied to geopolitics, vitality costs and credit score markets.
In a brand new Ideas on the Market podcast episode, Tang says the financial institution expects the US financial system and company earnings to stay resilient, whereas synthetic intelligence (AI) spending continues to drive a serious funding cycle throughout industries.
Tang says the present macro backdrop nonetheless helps threat property.
“Throughout markets, macro and micro fundamentals assist threat property. Within the US, development ought to maintain up.”
The strategist additionally highlights Morgan Stanley’s bullish forecast for US equities and earnings development.
“Our US Fairness Strategist’s S&P 500 goal for mid-2027 stands at 8,300, supported by anticipated earnings development of 23 p.c in 2026 and 12 p.c in 2027. The momentum is coming from bettering earnings.”
Tang notes that AI-related funding in knowledge facilities, chips, energy methods and networks is predicted to stay a dominant drive throughout markets, although the spending growth might additionally strain credit score markets as firms situation extra debt to finance growth.
Morgan Stanley says it continues to favor US equities over core fastened earnings.
“That’s why we advocate a balanced allocation with a risk-on tilt: obese equities, underweight core fastened earnings, and maintain different fastened earnings, commodities and money at benchmark weight. Inside equities, we favor the U.S. as a result of earnings look robust and the risk-reward seems to be higher than in different areas. Europe and Japan additionally provide upside, however Europe has extra publicity to vitality disruptions, and rising markets lack a broad macro and micro narrative regardless of pockets of energy.”
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