Morgan Stanley strategists tout health stocks in “late cycle” market By Reuters

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<span>© Reuters. FILE PHOTO: A screen displays the trading information for Morgan Stanley on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 19, 2022. REUTERS/Brendan McDermid</span><br />
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<p>By Lewis Krauskopf</p>
<p>NEW YORK (Reuters) &#8211; Morgan Stanley equity strategists said on Monday that markets are in a &#8220;late cycle&#8221; environment, with healthcare stocks poised to benefit because they have both defensive and growth properties.</p>
<p>&#8220;We view this year as an extension of the late cycle period often experienced when the (Federal Reserve) is expected to pause or reverse its hawkish policy stance,&#8221; strategists led by Michael Wilson said in a research note.</p>
<p>Morgan Stanley noted that healthcare has underperformed; the health sector is down 2.5% year-to-date versus a 16.5% rise for the overall index. </p>
<p>But the bank&#8217;s strategists said they were &#8220;overweight&#8221; the sector, calling it a &#8220;late cycle outperformer given its defensive and growth properties.&#8221;</p>
<p>&#8220;Earnings revisions are turning higher for the cohort and valuation remains attractive,&#8221; the strategists wrote.</p>
<p>Overall, the strategists&#8217; &#8220;late cycle playbook&#8221; included a &#8220;barbell&#8221; portfolio approach with defensive growth on one side and energy and industrials &#8211; two areas that tend to benefit in strong economies &#8211; on the other.</p>
<p>Separately, strategists at BofA Global Research said their US Regime Indicator officially switched to a &#8220;recovery&#8221; phase for the economy, with metrics such as inflation and GDP improving.</p>
<p>Previous recovery regimes have seen pro-cyclical areas such as financials fare well, while utilities and other defensive groups lagged, BofA said in a note on Sunday.</p>
<p>Meanwhile, the recovery phase has also seen value and higher risk stocks lead, BofA wrote.</p>
<p>&#8220;These would mark a reversal of 2023&#8217;s mega-cap growth leadership,&#8221; BofA said in the note. </p>
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<br /><a href="https://www.investing.com/news/stock-market-news/morgan-stanley-strategists-tout-health-stocks-in-late-cycle-market-3171906">Source link </a></p><p>The post <a href="https://forextraderhub.com/morgan-stanley-strategists-tout-health-stocks-in-late-cycle-market-by-reuters.html">Morgan Stanley strategists tout health stocks in “late cycle” market By Reuters</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>

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