Morgan Stanley think again. Four months after issuing a negative rating (underweight) on the future trend of the global stock market, the Wall Street giant changes its mind and positively revise the judgment: the new rating is neutral.
“We are closing the position underweight we had on global equities since last July - explains Andrew Sheets, head of the Bank's cross-asset strategy division - We thought that weaker growth would put pressure on valuations, instead - despite the continued slowdown in the economy - the MSCI ACWI Global Equity Index gained around 3%.. As our economists are predicting now a better outlook, we believe it makes sense to bring our assessment closer to the neutral".
But there could also be more behind the choice to change the rating. The Zerohedge site claims in fact that Morgan Stanley has received a series of not exactly calm phone calls from some customers. Investors were evidently piqued that Wall Street – contradicting the Investment Bank's predictions – continued to break records. Which of course meant less gains for those who had chosen to sell, or even losses for those who had gone so far as to sell short.
The problem is that the rating review perhaps comes a bit late, because the feeling is that the American markets, after so many peaks, have started to test their records. It doesn't help the stalemate on the US-China negotiations on tariffs, which seemed to be on its way up until a few weeks ago, but continues to worry the economies of half the world and probably won't be resolved within the year.
