Morgan Stanley vurderer, at markedet vendte i sidste uge, og at det har bevæget sig fra en “downturn”-fase til en “repair”-fase. Banken har overvægtet virksomhedsobligationer i USA og Europa.
Uddrag fra Morgan Stanley:
In the midst of the current public health crisis, there’s a temptation to assume that investors are facing something unique and that historical patterns no longer apply.
But we disagree with this notion. As unusual, uncertain and unsettling as the current environment is, key elements of the business cycle, we think, remain intact. We believe strongly that markets lead the economy, not the other way around, and that history suggests that recently weak economic data can actually support higher 12-month returns for credit and lower levels of market volatility.
When thinking about the business cycle, we find a couple of notions helpful. First, that the economy is cyclical: It moves in waves, as caution and underspending usually give way to optimism and excessive spending. That excess then leads to recessions, and those recessions reset the economic cycle, starting the whole process again.
It all sounds simple enough, but with thousands of possible economic indicators, trying to model that process can easily become noisy and overwhelming. At Morgan Stanley, our cycle indicator is based on 10 large key metrics for the U.S. economy, which have tended to be leading. This simplification of the economic cycle, in aggregate, can be broken down into one of four possible stages. This data can be either better or worse than average, and it could be rising or falling. And those four potential phases, or seasons if you will, of our cycle indicator are the four possible outputs.
Such analysis of this model makes two things clear. First, markets regularly lead the economy rather than the other way around. For example, buying stocks when economic data is weak but prices are low has consistently produced better returns than buying when economic data is strong but prices are high.
Second, there are very important patterns in the way that cycles interact with market performance and different asset class leadership. Credit spreads and market volatility often start improving before equity markets do, and do so even as the economic data is continuing to get worse. And I think there’s some logic to this, as tough times can make companies more conservative, benefiting their bondholders over their stockholders.
Meanwhile, it’s very possible and common for economic data to worsen, even after the peak of economic uncertainty is behind us, a reason that market volatility can fall, even as data remains weak and a recession lingers.
Thinking about the cycle is an important part of our investment process at Morgan Stanley. But it’s especially relevant today because the models we follow have just had an important change of signal.
From the middle of 2019 until last week, they were in the phase we call “downturn,” when the data is better than average, but it’s no longer improving. And that phase is generally associated with worse than average 12-month returns for stocks and corporate bonds. But last week, the model changed. Data is still getting weaker, but it’s now worse than average.
And that new phase, which we call “repair,” has historically meant better returns for corporate bonds and lower levels of market volatility. We are overweight on corporate credit in the U.S. and Europe across both investment grade and high yield.
