Morgan Stanley hører til de mest skeptiske eller bekymrede blandt de amerikanske investeringsbanker, og det fremgår også af den seneste analyse fra Lisa Shalett, Chief Investment Officer, Wealth Management. Hun opridser to scenarier for virkningen af centralbankens stramning med rentestigninger for at bekæmpe inflationen: At Fed gør for meget eller gør for lidt. Det er det sidste scenarie, der er det mest risikable, for hvis Fed ikke får bugt med inflationen, går det ud over investorernes og pensionsopsparernes købekraft og virksomhedernes indtjening. Derfor mener hun, at investorerne skal indstille sig på mere volatilitet og lavere aktiekurser. De må investere i defensive aktier og sørge for at have rigeligt med penge til at udnytte nye muligheder. Men de skal dog ikke “gøre rent bord” – i hvert fald ikke endnu. De må have tålmodighed.
HOW INVESTORS CAN PREPARE FOR WHAT’S NEXT
Recent moves by the Federal Reserve have stoked fears of a policy error that could alternately lead to slowed growth or untamed inflation. How to prepare for either scenario.
In a sense, it is encouraging that investors now have some clarity on the likely starting point of the Fed’s plans. But this sort of violent reaction to a Fed press conference suggests the more profound underlying anxieties that investors need to heed.
In particular, we see signs that markets may be grappling with at least two scenarios involving a potential Fed policy mistake, both with significant repercussions for the U.S. economy and markets:
Scenario 1: The Fed does “too much, too late.” Recent extreme moves in the Treasury yield curve may suggest that the Fed’s effort to fight inflation could set off a recession. Key to this view is that the central bank is beginning to tighten monetary policy just when the economy may be slowing on its own. Evidence of that includes:
- Weaker retail sales, as higher prices and the Omicron variant drag on business activity and consumption.
- A near 10-year low in consumer confidence.
- Potential weakness in new manufacturing orders, signaled by the contribution of inventory-building to fourth-quarter 2021 gross domestic product.
- Expiration of last year’s child tax credit, which could shave $190 billion off personal-income receipts.
Scenario 2: The Fed does “too little, too late.” On the flip side, it’s possible the Fed may fail to quell inflationary pressures, given that the fed funds rate—at near zero and estimated to hit only around 2% by the end of the hiking cycle—is still far from current levels of inflation (7% year-over-year) and economic growth (6.9% annualized). Factors that could keep inflation elevated include:
- Potential for further energy-related shocks.
- Continued supply-chain pressures.
- Upward direction in wages, which could result in a wage-price spiral.
Under this scenario, economic growth runs hotter, but real, or inflation-adjusted, gains remain fleeting. Inflation begins to do real damage to the purchasing power of retiree savings, and corporate profit growth stalls out.
Either way, the Fed has suggested it will be flexible and data-dependent as it starts tightening in earnest, and its signals and market moves—especially the Treasury yield curve—bear close watching.
We believe investors will need to brace for yet more volatility and lower stock valuations. We encourage investors to lean defensive in both stock and bond positions with a short-term focus and to continue to build cash for opportunistic deployment. U.S. stocks have certainly taken a beating so far this year, and their price/earnings multiples have indeed compressed, but we believe it is premature to call “all clear.” Stay patient.