Morgan Stanley advices for Buying On Dips

Published: Wilson Clark

On: Aug 2017

After the Brexit vote engulfed the stocks of many firms with limited exposure to the European Union. Reportedly, Morgan Stanley sees them as a great buying opportunities. The research team wrote that, “During macro-driven market dislocations, our bottom-up analysis remains as important as ever. We think that such bottom-up analysis can reveal several opportunities in stocks. It may have been caught up in the selloff, even though having limited exposure to the macro effects.”

They further added that, “We have also asked our US equality analysts to identify overweight rated stocks. Mainly those with limited downside to their bear case and their fundamentals are unexpectedly negatively impacted by Brexit. For each of these names we consider the post-vote weakness has been creating an opportunity for adding to positions.”

After the Brexit vote engulfed the stocks of many firms with limited exposure to the European Union. Reportedly, Morgan Stanley sees them as a great buying opportunities. The research team wrote that, “During macro-driven market dislocations, our bottom-up analysis remains as important as ever. We think that such bottom-up analysis can reveal several opportunities in stocks. It may have been caught up in the selloff, even though having limited exposure to the macro effects.”

They further added that, “We have also asked our US equality analysts to identify overweight rated stocks. Mainly those with limited downside to their bear case and their fundamentals are unexpectedly negatively impacted by Brexit. For each of these names we consider the post-vote weakness has been creating an opportunity for adding to positions.

Morgan Stanley is known as ‘inclined to buy’ into the market, particularly if there is a dip. Because they expects index returns to moderate over time. It has also outlined six key themes in its portfolio. Through this investors may find buying opportunities. So, here we have mentioned Morgan Stanley’s four reasons to buy as well as sell the market. Just check it out below.

Reasons to Buy the market:

  • Policy and politics appear to be in good shape. It will augurs well for growth in 2018.
  • The growth cycle is turning positively because it has been reaffirmed by macro-leading indicators such as consumptions,trade and public investments.
  • Valuations are reasonable in many parts. It has also come off compared to emerging markets.
  • Liquidity looks amazing. The recession of corporate balance sheet has likely ended.

       Reasons to Sell the market:

  • The state level fiscal slippages could harm the market.
  • The sell side estimates are very high.
  • Mid-cap valuations seems stretched. Stocks of some high-quality firms appears expensive.
  • Market dynamics are challenging due to the rise in the valuations and prices as given by equity supply.

Morgan Stanley is known as ‘inclined to buy’ into the market, particularly if there is a dip. Because they expects index returns to moderate over time. It has also outlined six key themes in its portfolio. Through this investors may find buying opportunities. So, here we have mentioned Morgan Stanley’s four reasons to buy as well as sell the market. Just check it out below.

Reasons to Buy the market:

  • Policy and politics appear to be in good shape. It will augurs well for growth in 2018.
  • The growth cycle is turning positively because it has been reaffirmed by macro-leading indicators such as consumptions,trade and public investments.
  • Valuations are reasonable in many parts. It has also come off compared to emerging markets.
  • Liquidity looks amazing. The recession of corporate balance sheet has likely ended.

       Reasons to Sell the market:

  • The state level fiscal slippages could harm the market.
  • The sell side estimates are very high.
  • Mid-cap valuations seems stretched. Stocks of some high-quality firms appears expensive.
  • Market dynamics are challenging due to the rise in the valuations and prices as given by equity supply.