Morgan: Renten skal stige, før aktierne stiger

Morgan Stanley mener, at aktiemarkedet kun kommer ud af det nuværende niveau, hvis risikoen for nul-renter fjernes. Morgan mener, at fire forhold kan stimulere aktimarkedet: En rentestigning, en ny finanspakke, en stærkere genstart af amerikansk økonomi eller øget inflation.

Uddrag fra Morgan:

Financial Repression Is Alive and Well

The big difference between today and 2009 comes down to interest rates, more specifically longer term interest rates or 10 year treasury yields. In 2009, during the worst part of the downturn and while the banking system was in the middle of a financial crisis, 10 year treasury yields remained well above 2%.

Today we are stuck well below 1 percent and closer to 50 basis points. Just as important, in my view, is the observation that 10 year real rates are deep in negative territory, whereas in 2009 real rates were well above 1% and never really threatened the zero bound.

Lower nominal 10 year treasury yields have allowed P/E multiples to trough 30% higher than we observed in 2009. When I hear others suggest stocks are overvalued at current prices, I don’t think they’re appropriately incorporating the lower interest rate environment in their analysis. Lower rates typically mean higher multiples, particularly after earnings forecasts have been cut by 20% or more. In other words, trough earnings typically lead to peak multiples.

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If there’s one thing that still argues against my bullish view, it’s that real 10 year interest rates are negative. Our work suggests the equity risk premium is unlikely to fully normalize from today’s level of 425 basis points towards 300 basis points, as long as real rates remain below zero.

Therefore, and perhaps ironically, in order for stocks to break out of their recent range to the upside, we actually need to see rates move higher. Ultimately, we believe that will happen and we see four potential catalysts.

One, using Japan and Europe as examples, the Fed could decide a flat yield curve impairs the banking system, and they should let 10 year yields rise. Two, an additional $1-2 trillion in fiscal stimulus brings back the bond vigilantes. Three, the reopening of America comes faster and goes more smoothly than expected, making our V-shaped recovery more consensus. Or four, supply chain issues appear as demand returns, leading to price inflation in the more cyclical parts of the economy.

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The bottom line is that markets are trading very consistent with the way they typically do when the economy enters a recession. We think the only missing ingredient for higher prices is higher 10 year yields. I think that could be about to happen and therefore continue to recommend investors look to buy more early cyclical parts of the market and smaller cap stocks whenever prices pullback, like over the past few weeks.

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