With the presidential contest in the rear view mirror, investors can now focus on the resolution of the Fiscal Cliff negotiations between the White House and the GOP-led House. Against that backdrop, Morgan Stanley held it “Post-Election Financial Market Outlook for 2013” in Manhattan yesterday during which several Morgan Stanley executives gave their predictions on what lies ahead for the market and where they are placing their bets in the coming year.
Overall, they expect a tough period of political wrangling that will unnerve the markets until a deal of some kind is ultimately concluded. Both parties, they stressed, have too much at stake to let the U.S. economy plunge into another deep recession.
As for actual investment strategies, he said Morgan Stanley is looking to overweight in U.S. equities, particularly large cap stocks, and emerging markets; underweight in Japanese equities; and to hold a neutral position in European equities.
Global equities may not be loved, “but they had a good year,” Reinhard said.