[ad_1]
Copper forbidden
DirectEmerging markets have had a difficult year, but that will change dramatically next year, Morgan Stanley said.
In a note released on Monday, the US bank raised its recommendation to the emerging market equities market next year to move from underweight to overweight the portfolio, while US stocks reduced its recommendation to underweight.
Morgan Stanley expects an upcoming rise in the stock market in emerging economies. "We think the bear market is almost over in these markets," Morgan Stanley said.
In 2018, many investors pulled their money from emerging markets to the US stock market because of higher bond yields and a stronger dollar. Tensions in Turkey and Argentina have intensified, giving investors reasons to sell their holdings in emerging markets.
Morgan Stanley has said it prefers its US counterparts to emerging markets, because of the expected stability of growth in these economies next year, compared to the expectations of a slowdown in their US counterparts.
The US bank expects 2.3% growth in the world's largest economy in 2019, up from 2.9% this year and 1.9% in 2020.
He said the expected slowdown in US economic growth would likely lead to a weaker dollar, providing an outlet for emerging markets heavily in debt in US dollars.
In emerging markets, the report expects economic growth of 4.8% this year and 4.7% next year, before reaching 4.8% in 2020.
The bank recommended a weight gain for the stock markets in Peru, Brazil, Thailand, India and Indonesia, while the bank recommended a weight reduction for Greece, the United Arab Emirates, Colombia, Philippines and Mexico.
Morgan Stanley also expressed its preference for so-called value stocks for growth stocks globally.
Value stocks are trading at levels lower than what they should be. Growth stocks are more likely to rise as the report recommends an overweight position in mining and metals stocks.
With respect to bonds, the report gives a neutral view of government bonds, while recommending a reduction in credit weight and an increase in cash flow.
In a separate context, the Bank has identified 3 adverse wind risks that could limit their global weighted estimates by equities: the first concerns risks to global economic growth and potential pressures on companies due to increases in wages and salaries. financing costs that could limit earnings growth.
The third reason is that there is a marked weakness in the potential growth of business income worldwide, especially in China and Europe.
[ad_2]
Source link
