MORGAN STANLEY: Next Moves in a Manic Market
Morgan Stanley issued the following announcement on March 9.
Markets are lower, but have also been swinging wildly on a day-to-day basis. Here’s what may come next.
Lisa ShalettChief Investment Officer, Wealth Management
So far in March, U.S. stock markets have been, not just volatile, but characterized by big up days and large down days. Uncertainty around the extent and duration of the coronavirus outbreak, combined with the late-stage business cycle and election-year unpredictability, also help explain the manic market behavior.
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I expect this volatility to continue near term and urge investors to remain patient. While I don’t have a crystal ball, these large day-to-day swings reflect potentially extreme scenarios, in both directions, for the economy and for markets.
What Could Be Next?
Recession odds have materially increased. Initially, with news of the outbreak in China, investors worried about potential supply disruption. Now, the concern lies with a shock to both supply and demand. The full extent of lost activity is unknowable at this point. The longer consumers and corporate executives remain uncertain about the risks they face, the more likely they will curtail spending, creating a major headwind for economic growth.
Original source: https://www.morganstanley.com/ideas/next-moves-in-manic-market