In addition to their 2010 outlook (see here for the MS outlook in our 2010 investment guide) Morgan Stanley has recently released their 5 themes for 2010. The list provides some actionable macro ideas for the trading year:
1. A tale of two worlds. Growth in the emerging world becomes more balanced and will by far outpace growth in the advanced economies this year.
2. ‘BBB recovery’ in the G10. We expect the recovery in the advanced economies to be creditless and jobless, making it bumpy, below-par and boring.
3. G3 growth differentiation. We see the US as the growth leader among the G3, the euro area to lag behind, and Japan to double-dip.
4. ‘AAA liquidity cycle’ remains intact. Central banks will crawl rather than rush towards the exit, so global liquidity continues to be ample, abundant and augmenting.
5. Sovereign and inflation risks on the rise. The next crisis is likely to be a crisis of confidence in governments’ and central banks’ ability to shoulder the rising public sector debt burden without creating inflation.
Source: Morgan Stanley