Thoughts on the Market

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1. The Next Stage of the Market Correction

   26 oktober 2026 · 5 min

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   Is the end of the correction in sight? Our CIO and Chief U.S. Equity Strategist looks at what could bring this pullback to an end. Lees meer

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   ----- Transcript -----

   Welcome to Thoughts on the Market. I'm Mike Wilson, Morgan Stanley’s CIO and Chief U.S. Equity Strategist.

   Is the end of this equity market correction in sight? Today on the podcast, I’ll share what I think could turn the tide.

   It's Monday, October 26th at 11:30 am in New York.

   So, let’s get after it

   The correction that began in June is now well advanced beneath the surface. But I believe the high-quality S&P 500 index may still have some unfinished business. Until that plays out, I don’t think we can say the adjustment is complete.

   The real question to ask: how bad does it have to get before it gets better?

   We have described this correction as a classic mid-cycle transition. The peak rate of change in earnings revisions arrived right on schedule, about a year after the recession troughed. And the market responded the way that it usually does: early-cycle leaders with more operating and financial leverage started to underperform, while higher-quality, asset-light, services-oriented businesses moved to the front.

   This quality rotation is now well understood though, and positioning has followed it. Ironically, the final step is usually a convergence between the resilient high quality S&P 500 index and the weaker breadth beneath. We may already be seeing the beginning of that meeting in the middle. If the index does move lower, I believe 7100-7200 on the S&P 500 is where the correction should find material support.

   The reason I believe we will ultimately have a positive resolution to this transition is that a lot of damage has already occurred. Roughly 60 percent of Russell 3000 stocks are down more than 20 percent since June. And the hit has been even more severe in early-cycle areas like Semiconductors, Autos, Consumer Cyclicals, and Capital Goods.

   At the same tim…

2. One Global Shock, Different Rate Paths

   23 oktober 2026 · 12 min

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   The energy shock is global, but the policy response isn’t uniform. In the second of our two-part roundtable, our economists unpack the forces shaping interest rates across the U.S., Europe and Asia. Lees meer

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   ----- Transcript -----

   Seth Carpenter: Welcome to Thoughts on the Market. I'm Seth Carpenter, Morgan Stanley's Global Chief Economist and Head of Macro Research.

   Michael Gapen: I'm Michael Gapen, Chief U.S. Economist.

   Jens Eisenschmidt: I'm Jens Eisenschmidt, Chief Europe Economist.

   Chetan Ahya: And I’m Chetan Ahya, Chief Asia Economist.

   Seth Carpenter: Yesterday, we talked about why global growth is continuing to power on, why investment is playing a larger role, and how that investment cycle is spreading across regions.

   Today, we're going to take a deeper dive and think about monetary policy and what's going on.

   It's Friday, October 23rd, at 10am New York.

   Jens Eisenschmidt: 4pm in Frankfurt.

   Chetan Ahya: And 10pm in Hong Kong.

   Seth Carpenter: When I look around the world and think about especially developed market central banks, well, they're kind of all tightening at the same time – but maybe for somewhat different reasons.

   Let's start with just a really broad policy question. Why are the Fed, the ECB, the Bank of England, and the Bank of Japan all tightening policy when their economies look so different?

   Mike, I'm going to start with you back here in the U.S. with the Fed. How are you thinking about what the Fed is doing right now?

   Are they just recalibrating the stance of policy? Or is this a fundamental change where they're trying to rein in growth in the economy?

   Michael Gapen: The way I look at it is this is a story about persistent inflation, and I would look at it as a recalibration of policy. I think the majority of participants on the FOMC know the Fed can't pump more oil or get, you know, oil through the Strait of Hormuz. So, it's about leaning against second-round effects.

   Inflation is gradually mov…

3. Economic Roundtable: What’s Keeping Global Growth Going?

   22 oktober 2026 · 15 min

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   In the first of a two-part discussion, our roundtable explores how AI investment, trade and consumer spending are sustaining global growth, and what could put that resilience at risk. Lees meer

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   ----- Transcript -----

   Seth Carpenter: Welcome to Thoughts on the Market. I'm Seth Carpenter, Morgan Stanley's Global Chief Economist and Head of Macro Research.

   Michael Gapen: I'm Michael Gapen, Chief U.S. Economist.

   Jens Eisenschmidt: I'm Jens Eisenschmidt, Chief Europe Economist.

   Chetan Ahya: And I'm Chetan Ahya, Chief Asia Economist.

   Seth Carpenter: And today, our fourth quarterly economic roundtable discussion is going to try to take a wide-angle view on the global economy – and it has held up despite higher interest rates, higher energy prices, geopolitical uncertainty, you name it.

   It's Thursday, October 22nd at 10am in New York.

   Jens Eisenschmidt: And 4pm in Frankfurt.

   Chetan Ahya: And 10 pm in Hong Kong.

   Seth Carpenter: All right then. Let me start with that big question Why has global growth held up better than maybe would have been expected given everything that we've seen ?

   Mike, maybe I'll start from the U.S. perspective with you. What do you think has mattered most? What is driving – if I dare use an overused word – the resilience of the economy?

   Michael Gapen: Most of us believe AI-related spending is interest rate insensitive and geopolitically insensitive. And certainly, I think the data has borne that out. And in the direct translation of AI hypercaler Capex spending to growth, we find that AI is accounting for 4/10 to 6/10 contribution to growth in any given quarter. You could nudge that a little higher if you think it’s creating productivity, which we do.

   And that spending is underpinning asset market appreciation – or certainly has for the past several years. And that is underpinning resilient spending by upper income households.

   So, I think in the U.S. the clear answer is AI-related spending, but also its lin…

4. Inside the Biggest Bond Boom in Years

   21 oktober 2026 · 13 min

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   Can markets absorb this much new debt? Our panel examines strong demand for investment-grade bonds, stress in high-yield debt and the macro risks that could shape the next six to twelve months in credit markets. Lees meer

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   ----- Transcript -----

   Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley.

   Anish Shah: I'm Anish Shah, Global Head of Debt Capital Markets.

   Rehan Latif: I am Rehan Latif, Global Head of Credit Trading.

   Samer Oweida: And I'm Samer Oweida, Global Head of Foreign Exchange and Emerging Markets.

   Andrew Sheets: Today, a discussion of historical levels of bond issuance and how it could affect the broader markets.

   It's Wednesday, October 21st at 9am in New York.

   Gentlemen, it's great to talk with you. I think what we're talking about is an issue that really cuts across all parts of Morgan Stanley's businesses, from issuance to credit trading to macro markets and beyond.

   And I'd like to get into it, but just quickly to kind of frame where we are. Anish, we are in the midst of a historic investment cycle in AI CapEx. We're in the midst of a very large pickup in M&A activity that I also want to make sure we get into.

   But you sit at the intersection of our capital markets businesses. Talk a little bit about what we're seeing in the bond issuance space.

   Anish Shah: Sure, Andrew. I look after all of our new issue capital markets business in credit, and that's across the credit spectrum and across geographies. And I'm constantly looking to Rehan for the latest in investor sentiment and how we can deliver the right product for our issuing clients. And to Samer on macro views that impact our clients every day.

   We are in the midst of a significant decommoditization of new issue credit markets and a decompression in credit. It's really driven by four important factors.

   One is, as you note, unprecedented levels of issuance. Investment grade debt volume…

5. AI’s Next Winners: Signals From Private Markets

   20 oktober 2026 · 10 min

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   With AI startups scaling at record speed, our analysts Sabrina Hao, Adam Wood and Brian Nowak share takeaways from Morgan Stanley's Spark Conference on AI returns, competitive moats and implications for public markets. Lees meer

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   ----- Transcript -----

   Sabrina Hao: Welcome to Thoughts on the Market. I'm Sabrina Hao, Morgan Stanley's AI and Tech Thematic Equity Strategist.

   Adam Wood: And I'm Adam Wood, Head of U.S. Software Research at Morgan Stanley.

   Brian Nowak: And I'm Brian Nowak, Head of U.S. Internet Research.

   Sabrina Hao: Today, what private companies are telling us about the AI opportunity and what it means for public markets.

   It's Tuesday, October 20th, at 10am in New York.

   Last week, we were at our Spark Private Company conference in California, bringing together more than a hundred startups across software, robotics, AI infrastructure, and beyond. There was even a company helping to manufacture pharmaceuticals in space.

   It was a really interesting week to be at the conference given everything that was happening in the market. But really, we came away feeling even more positive about the AI cycle.

   While public market investors are waiting for returns to justify trillions of dollars in AI spending, we're already seeing that pay off in private markets. AI demand is real, companies are delivering tangible returns for customers, and startups are scaling faster than ever.

   Adam, let's start with growth. We heard from startups scaling at extraordinary speeds. One was approaching [$] 4 billion in annual recurring revenue in two years, another reaching a billion in under a year.

   What really stood out to you about the pace of AI adoption, and why aren't we necessarily seeing that same growth at established software companies?

   Adam Wood: So yeah, absolutely, the pace was remarkable. And clearly one of the standouts from the conference when we used to discuss how quickly a company could get to a $1 billion so-called unicorn va…

6. A Narrower Path for Growth and Stability

   19 oktober 2026 · 5 min

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   Higher rates can take time to filter through the economy, making their full impact difficult to judge. Arunima Sinha from our U.S. and Global Economics teams considers where the pressure may emerge next and how policymakers could navigate the competing risks. Lees meer

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   ----- Transcript -----

   Welcome to Thoughts on the Market. I'm Arunima Sinha, from the Morgan Stanley’s U.S. and Global Economics teams.

   Today, I'll talk about what rising rates mean for economic activity, inflation, and the policy path.

   It’s Monday, October 19th, at 10am in New York.

   The FOMC raised rates in September. But expectations for future hikes remain volatile. Within hours of the latest CPI print, markets round-tripped, pushing the probability to even for an October hike before retreating.

   Now, consistent with our baseline forecast, the market assigns December the highest likelihood for the next hike. But moves further along the U.S. curve matter even more; notably the 10-year yield shifted.

   One question that arises, taking a step back is – how much we should worry that broad-based inflation upside means tighter policy is required to push down inflation and, therefore, growth? Or have financial conditions tightened enough on their own that the central bank has less, not more work to do?

   The calibration of monetary policy has always been difficult, and now it is becoming urgent.

   Economists try to put the level of interest rates into the context of where they stand relative to the economy's natural rate. Stronger productivity growth and investment demand should mean a higher natural rate, so a given level of rates is less restrictive.

   The rise in long-term treasury yields alongside still firm growth and earnings expectations is an indication that the neutral rate may indeed be higher. When yields rise because growth prospects are improving, expected returns rise and the demand for capital strengthens. In that setting, higher rates are not necessarily co…

7. AI Boom Faces a Higher-Yield Roadblock

   16 oktober 2026 · 4 min

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   Our ABS Strategist Carolyn Campbell explains how rising borrowing costs are slowing the AI data center boom and what could drive a rebound in financing. Lees meer

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   ----- Transcript -----

   Carolyn Campbell: Welcome to Thoughts on the Market. I'm Carolyn Campbell, Morgan Stanley's Asset-Backed Securities Strategist.

   Today, why the AI boom is running into an unexpected obstacle: the cost of borrowing money.

   It's Friday, October 16th, at 10am in New York.

   Demand for data center facilities is booming. Yet even as companies race to build more capacity, the financing for them is becoming increasingly expensive. And that tension is creating an interesting story in credit markets.

   Since January, five-year Treasury rates have climbed more than one percentage point, and spreads for data center assets have also gone wider. At the beginning of 2026, the highest-rated data center bonds offered yields below 5 percent. Today, similar bonds are yielding closer to 7 percent, and that increase matters enormously for companies trying to finance multi-billion-dollar facilities.

   Many operators turn to the securitized credit markets to raise money. Essentially, they issue bonds backed by the income generated by their data centers. By the time these bonds are issued, construction on the data center is complete, the power is secured, and the rent is already being paid.

   So, on the one hand, cash flows are stabilized – but there is a catch. These facilities often sign long-term leases well before they seek financing in the securitized credit market.

   By the time they're ready to issue these bonds, rental income is already locked in. And so, when interest rates rise quickly, as we've seen this year, and these borrowing costs increase, revenues aren't necessarily keeping pace.

   Our analysis suggests that when borrowing costs approach 8 percent, issuing these bonds becomes significantly more challenging under these current financing terms. And we're already …

8. The Missing Piece in Latin America’s Bull Case

   15 oktober 2026 · 4 min

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   Our Chief Latin America Equity Strategist Nikolaj Lippmann explains why Brazil’s election, the cost of capital, AI investment and geopolitics could help unlock a new era of growth across Latin America. Lees meer

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   ----- Transcript -----

   Welcome to Thoughts on the Market. I'm Nikolaj Lippmann, Morgan Stanley's Chief Latin America Equity Strategist.

   Today – why Brazil could be the missing piece of what we call LatAm Spring, and what AI has to do with it.

   It’s Thursday, October 15th, at 10am in New York.

   Brazilian equities rallied sharply last week after a surprising first-round presidential election result. Flávio Bolsonaro finished ahead of President Lula, setting up a runoff later this month. The outcome remains uncertain. But for investors, I think there’s a bigger question. Can Brazil approach a policy shift that unlocks something the country has lacked for years: investment.

   We've long argued that Latin America is moving from a consumption-led economy towards an investment-led cycle, thanks to: 1. Changing geopolitics; 2. investment-friendly policies; and 3. The potential for lower interest rates. What's more, this fits into the framework of the AI CapEx cycle, driving the global and especially the U.S. economy that has moved from consumption to CapEx, as argued by Mike Gapen, our U.S. economist. We're already seeing signs of this LatAm Spring in Argentina, Chile, Peru and Colombia. Brazil could be the largest missing piece. And there are three reasons why.

   First, the cost of capital. Brazil remains one of the world's most expensive places to invest. High government debt and elevated interest rates have made fixed income investment more attractive than equities or entrepreneurial risk-taking. But credible fiscal reform could change that equation. Lower government spending could reduce borrowing costs, strengthen the currency, and encourage private investment. Which means capital could shift from sitting in fixed-income assets …

9. What to Expect From the UK Budget

   14 oktober 2026 · 8 min

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   The UK budget arrives later this month amid competing predictions about growth, inflation and public finances. Andrew Sheets and Bruna Skarica examine how the country’s economy defies expectations. Lees meer

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   ----- Transcript -----

   Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley.

   Bruna Skarica: And I'm Bruna Skarica, Morgan Stanley's Chief UK Economist.

   Andrew Sheets: Today, the UK makes a budget. Why it matters? And more generally, what we've gotten right and wrong about the country.

   It's Wednesday, October 14th, at 2pm in London.

   Bruna, it's great to be here talking with you, and I'd like to get into a bigger discussion on the UK and what we've gotten right and wrong about the direction of the country this year. But more immediately, it has a very big event coming up.

   What is the budget, and why is there so much focus on it?

   Bruna Skarica: The budget is the UK's key fiscal event. It is the time of year when the Chancellor receives a refresh of economic forecasts and decides whether he needs to respond to these, whether there's any spending cuts or increases that are required, and whether there's any tax hikes or potentially tax cuts that are required too. All with the view of ensuring fiscal consolidation and executing on what is a self-imposed fiscal framework.

   Here in the UK, the main target for the Treasury is to achieve current budget balance in year three of the forecast. The fiscal watchdog forecasts five years of economic variables, and the idea is, by the third year, we ought to be spending outside of investment expenditure as much as we're receiving in tax receipts.

   So, all of that happens once a year in the budget.

   Andrew Sheets: Now, I might just stop you there [be]cause in the context of these other budget pictures that we see around the world – the U.S. is running a large budget deficit, France is running a large budget deficit, Japan'…

10. Asia Fixed Income Needs a Bigger Map

    13 oktober 2026 · 5 min

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    Our Head of Asia Credit Strategy Kelvin Pang explains why investors would benefit from a broader fixed income market in Asia, with opportunities across more countries, local-currency credit and dollar-denominated bonds. Lees meer

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    ----- Transcript -----

    Welcome to Thoughts on the Market. I’m Kelvin Pang, Head of Asia Credit Strategy [at] Morgan Stanley.

    Today – why the challenge in Asia fixed income may not be the region at all, but the way investors have traditionally looked at it.

    It’s Tuesday, October 13th at 8am in Hong Kong.

    Picture this. You’re shopping in a supermarket. As you walk down the aisles, you notice half of them are off limits. It’s unexpected.

    Something similar has happened in Asia fixed income. The region’s fundamentals remain supportive, but the traditional investment universe has become increasingly constrained.

    The pressure began in early 2023, when U.S. policy rates rose above those in much of Asia for the first time since before the Global Financial Crisis. The environment that had supported Asian bond markets for years turned upside down.

    Consider Asia-dollar credit. Issuers have increasingly turned to cheaper local-currency financing, which is shrinking dollar-bond supply. Asia-dollar credit is now on track for a fifth straight year of negative net supply. At the same time, investment-grade spreads have tightened to 55 basis points. That makes Asia investment-grade credit the most tightly valued major credit market globally.

    And investors have taken notice of this. Assets in dedicated Asia credit and high-yield funds have fallen 62 percent from their 2021 peak – from roughly $75 billion USD to around $29 billion USD.

    But we feel Asia itself is not the problem. In fact, Asia Pacific nominal GDP could rise from $41 trillion USD in 2025 to [$]54 trillion by 2031. That would account [for] roughly one-third of global nominal GDP growth over that period.

    And most importantly investment is also acceleratin…

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