Here's why Morgan Stanley is persisting with its call to buy government bonds.
Morgan Stanley strategists have been almost apologetic about their view that the stock market would struggle, in a year in which the S&P 500 SPX has gained 16%. But less remarked upon is that the investment bank’s team made another wrong call, in being bullish government bonds.
The strategists in particular are recommending the 5-year U.S. Treasury BX:TMUBMUSD05Y, and the 30-year Treasury inflation-protected security. They also note that the risks of a negative monthly payroll print are growing. Just taking into account the slowing momentum, a two-standard deviation sized downside miss could turn payrolls negative as early as the October report that is released in November. The recent 310,000 downward revision to past payrolls was unusually large outside of recessions, they add.
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. Ahead of Wednesday’s inflation data, the New York Fed will be releasing its monthly look at consumer expectations, which includes a look at inflation expectations.Instacart has set the terms of its initial public offering, with a proposed market capitalization of $7.5 billion.
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