Morgan Stanley’s chief US equity strategist Adam Parker is bullish.
In a note to clients on Monday, Parker wrote that, “We like US stocks, right here right now.”
But in addition to his bullish call on stocks, Parker also had a response to some of the pessimism that has permeated markets, especially from those investors in the bond market.
“Ten times this year we have thought to ourselves, ‘how could anyone buy a French government bond and hold it to duration when they can buy the S&P500?'” Parker writes.
“After all, the S&P500 total yield (dividend plus repurchase) is well over 4%, and you only get 41 basis points per year from France! The only logical pushback we see would be that we are on the precipice of sustained deflation, or that we are close enough to a recession that we will get a materially better entry point on US stocks. We find bond guys to be statistically significantly more negative human beings than average.”
As for stocks, Parker says that the US economy looks poised to repeat 2014, meaning that growth will accelerate in the second and third quarter of this year after a disappointing first quarter.
Are you a bond trader with a retort to Parker? Shoot an email to [email protected]