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Our strategists Michelle Weaver and Adam Jonas join analyst Christopher Snyder to discuss the most important themes that emerged from the Morgan Stanley Annual Industrials Conference in Laguna Beach.Michelle Weaver: Welcome to Thoughts on the Market. I'm Michelle Weaver, Morgan Stanley's U.S. Thematic Strategist.Christopher Snyder: I'm Chris Snyder, Morgan Stanley's U.S. Multi-Industry Analyst. Adam Jonas: And I'm Adam Jonas, Morgan Stanley's Embodied AI Strategist.Michelle Weaver: We recently concluded Morgan Stanley's annual industrials conference in Laguna Beach, California, and wanted to share some of the biggest takeaways.It's Tuesday, September 16th at 10am in New York.I want to set the stage for our conversation. The overall tone at the conference was fairly similar to last year with many companies waiting for a broader pickup. And I'd flag three different themes that really emerged from the conference. So first, AI. AI is incredibly important. It appeared in the vast majority of fireside conversations. And companies were talking about AI from both the adopter and the enabler angle. Second theme on the macro, overall companies remain in search of a reacceleration. They pointed to consistently expansionary PMIs or a PMI above 50, a more favorable interest rate environment and greater clarity on tariffs as the key macro conditions for renewed momentum. And then the last thing that came up repeatedly was how are companies going to react to tariffs? And I would say companies overall were fairly constructive on their ability to mitigate the margin impact of tariffs with many talking about both leveraging pricing power and supply chain shifts to offset those impacts. So, Chris, considering all this, the wait for an inflection came up across a number of companies. What were some of your key takeaways on multis, on the macro front? Christopher Snyder: The commentary was stable to modestly improving, and that was really consistent across all of these companies. There are, you know, specific verticals where things are getting better. I would call out data center as one. Non-res construction, as another one, implant manufacturing as one. And there were certain categories where we are seeing deterioration – residential HVAC, energy markets, and agriculture.But we came away more constructive on the cycle because things are stable, if not modestly improving into a rate cut cycle. The concern going in was that we would hear about deteriorating trends and a rate cut would be needed just to stabilize the market. So, we do think that this backdrop is supportive for better industrial growth into 2026.We have been positive on the project or CapEx side of the house. It feels like strength there is improving. We've been more cautious on the short cycle production side of the house. But we are starting to see signs of rate of change. So, when we look into [20]26 and [20]27, we think U.S. industrials are poised for decade high growth. Michelle Weaver: You've had a thesis for a while now that U.S. reshoring is going to be incredibly important and that it's a $10 trillion opportunity. Can you unpack that number? What are some recent data points supporting that and what did you learn at the conference? Christopher Snyder: Some of the recent data points that support this view is U.S. manufacturing construction starts are up 3x post Liberation Day. So, we're seeing companies invest. This is also coming through in commercial industrial lending data, which continues to push higher almost every week and is currently at now record high levels. So, there's a lot of reasons for companies not to invest right now. There's a lot of uncertainty around policy. But seeing that willingness to invest through all of the uncertainty is a big positive because as that uncertainty lifts, we think more projects will come off the sidelines and be unlocked. So, we see positive rate of change on that. What I think is often lost in the reassuring conversation is that this has been happening for the last five years. The U.S. lost share of global CapEx from 2000 when China entered the World Trade Organization almost every year till 2019 when Trump implemented his first wave of tariffs. Since then, the U.S. has taken about 300 basis points of global CapEx share over the last five years, and that's a lot on a $30 trillion CapEx base. So, I think the debate here should be: Can this continue? And when I look at Trump policy, both the tariffs making imports more expensive, but also the incentives lowering the cost of domestic production – we do think these trends are stable. And I always want to stress that this is a game of increments. It's not that the U.S. is going to get every factory. But we simply believe the U.S. is better positioned to get the incremental factory over the next 20 years relative to the prior 20. And the best point is that the baseline growth here is effectively zero. Michelle Weaver: And how does power play into the reshoring story? AI and data centers are generating huge demand for power that well outstrip supply. Is there a risk that companies that want to reshore are not able to do so because of the power constraints?Christopher Snyder: It's a great question. I think it's part of the reason that this is moving more slowly. The companies that sell this power equipment tend to prioritize the data center customers given their scale in magnitude of buying. But ultimately, we think this is coming and it's a big opportunity for U.S. power to extend the upcycle.Manufacturing accounts for 26 percent of the electricity in the country. Data center accounts for about 5 percent. So, if the industrial economy returns to growth, there will be a huge pull on the grid; and I view it as a competitive advantage. If you think about the future of U.S. manufacturing, we're simply taking labor out and replacing it with electricity. That is a phenomenal trade off for the U.S. And a not as positive trade off for a lot of low-cost regions who essentially export labor to the world. I'm sure Adam will have more to say about that. Michelle Weaver: And Adam, I want to bring robotics and humanoid specifically into this conversation as the U.S.' technological edge is a big part of the reshoring story. So how do humanoids fit into reshoring? How much would they cost to use and how could they make American manufacturing more attractive? Adam Jonas: Humanoid robots – we're talking age agentic robots that make decisions from themselves autonomously due to the dual purpose in the military. You know, dual purpose aspect of it makes it absolutely necessary to onshore the technologies.At the same time, humanoid robots actually make it possible to onshore those technologies. Meaning you need; we're not going to be able to replicate manufacturing and onshore manufacturing the way it's currently done in China with their environmental practices and their labor – availability of affordable cheap human labor.Autonomous robots are both the cause of onshoring. And the effect of onshoring at the same time, and it's going to transform every industry. The question isn't so much as which industry will autonomous robots, including humanoids impact? It's what will it not.And we have not yet been able to find anything that it would. When you think about cost to use – we think by 2040 we get to a point where to Chris's point, the marginal cost of work will be some factor of electricity, energy, and some depreciation of that physical plant, or the physical robot itself. And we come up with a, a range of scenarios where centered on around $5 per hour. If that can replace two human workers at $25 an hour, that can NPV to around $200,000 of NPV per humanoid. That's discounting back 15 years from 2040.Michelle, there's 160 million people in the U.S. labor market, so if you just substituted 1 percent of that or 1.6 million people out of the U.S. Labor pool. 1.6 million times $200,000 NPV; that's $320 billion of value, which is worth, well, quite a lot. Quite a lot of money to a lot of companies that are working on this. So, when we get asked, what are we watching, well, in terms of the bleeding edge of the robot revolution, we're watching the Sino-U.S. competition. And I prefer to call it competition. And we're also watching the terra cap companies, the Mag 7 type companies that are quite suddenly and recently and very, very significantly going after physical AI and robotics talent. And increasingly even manufacturing talent. So again, to circle back to Chris's point, if you want evidence of reshoring and manufacturing and advanced manufacturing in this country, look at some of these TMT and tech and AI companies in California. And look at, go on their hiring website and watch all the manufacturing and robotics people that they're trying to hire; and pay a lot of money to do so. And that might be an interesting indicator of where we're going.Michelle Weaver: I want to dig in a little bit more there. We're seeing a lot of the cutting-edge tech coming out of China. Is the U.S. going to be able to catch up?Adam Jonas: Uh, I don't know. I don't know. But I would say what's our alternative. We either catch up enough to compete or we're up for grabs. OK?I would say from our reading and working closely with our team in China, that in many aspects of supply chain, manufacturing, physical AI, China is ahead. And with the passage of time, they are increasingly ahead. We estimate, and we can't be precise here, that China's lead on the U.S. would not only last three to five years, but might even widen three to five years from now. May even widen at an accelerating rate three to five years from now.And so, it brings into play is what kind of environment and what kind of regulatory, and policy decisions we made to help kind of level the playing field and encourage the right kind of manufacturing. We don't want to encourage trailing edge, Victorian era manufacturing in the U.S. We want to encourage, you know, to skate to where the puck is going technology that can help improve our world and create a sustainable abundance rather than an unsustainable one. And so, we're watching China very, very closely. It makes us a little bit; makes me a little bit kind of nervous when we – if we see the government put the thumb on the scale too much.But it's invariably going to happen. You're going to have increased involvement of whichever administration it is in order to kind of set policies that can encourage innovation, education of our young people, repurposing of labor, you know. All these people making machines in this country now. They might get, there may be a displacement over a number of years, if not a generation.But we need those human bodies to do other things in this economy as well. So, we; I don't want to give the impression at all in our scenarios that we don't need people anymore. Michelle Weaver: What are the opportunities and the risks that you see for investors as robotics converges with this broader U.S. manufacturing story? Adam Jonas: Well, Michelle, we see both opportunities and risks. There are the opportunities that you can measure in terms of what portion of global GDP of [$]115 trillion could you look at. I mean, labor alone is $40 trillion.And if you really make humanoid that can do the work of two workers, guess what? You're not going to stop at [$]40 trillion. You're going to go beyond that. You might go multiple beyond that. Talking about the world before AI, robotics and humanoid is like talking about the world before electricity. Or talking about business before the internet. We don't think we're exaggerating, but the proof will be in the capital formation. And that's where we hope we can be of assistance to our clients working together on a variety of investment ideas. But the risks will come and it is our professional responsibility, if not our moral responsibility, to work with our partners across research to talk about those risks. Michelle, if we have labor displacement, go too quickly, there's serious problems. And if you don't, if you don't believe me, go look at, look at you know, the French Revolution or the Industrial Revolution, or Age of Enlightenments. Ages of scientific enlightenment frequently cohabitate times of great social and political turmoil as well. And so, we think that these risks must be seen in parallel if we want to bring forth technologies that can make us more human rather than less human. I'm sorry if I'm coming across as a little preachy, but if you studied robots and labor all day long, it does have that effect on you. So, Michelle, how do you see innovation priorities changing for industrials and investors in this environment?Michelle Weaver: I think it's huge as we're seeing AI and technology broadly diffuse across different segments of the market, it's only becoming more important. About two-thirds of companies at the conference mentioned AI in some way, shape, or form. We know that from transcripts. And we're seeing them continue to integrate AI into their businesses. They're trying to go beyond what we've just seen at the initial edge. So, for example, if I think about what was going on within AI adoption a couple years ago, it was largely adding a chat bot to your website that's then able to handle a lot of customer service inquiries. Maybe you could reduce the labor there a little bit. Now we're starting to see a lot more business specific use cases. So, for example, with an airline, an airline company is using AI to most optimally gate different planes as they're landing to try and reduce connection times. They know which staff needs to go to another flight to connect, which passengers need to move to another flight. They're able to do that much more efficiently. You're seeing a lot on AI being adopted within manufacturing to make manufacturing processes a lot more seamless. So, I think innovation is only going to continue to become more important to not only industrials, but broadly the entire market as well.Clearly the industry is being shaped by adaptability, collaboration, and a focus on innovation. So, Chris, Adam, thank you both for taking the time to talk. Adam Jonas: Always a pleasure. Michelle.Christopher Snyder: Thank you for having us on. Michelle Weaver: And to our listeners, thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen to the show and share the podcast with a friend or colleague today.

APAC stocks traded mixed amid some cautiousness ahead of upcoming risk events and despite the fresh record levels on Wall St.US Appeals Court declined to allow Trump to remove Federal Reserve Governor Cook; Cook can attend the FOMC's September 16th-17th meeting.US Senate voted 48-47 to confirm US President Trump's Fed nominee Miran to join the Fed board.European equity futures indicate an uneventful cash market open with Euro Stoxx 50 future +0.1% after the cash market closed with gains of 0.9% on Monday.DXY is a touch softer, extending on yesterday's downside. JPY marginally outperforms, whilst antipodeans lag.Crude futures marginally extended on the prior advances. 10yr UST futures plateaued overnight after catching a bid yesterdayLooking ahead, highlights include UK Jobs Report (Jul), Italian CPI Final (Aug), EZ Industrial Production (Jul), Labour Costs (Q2), German ZEW Survey (Sep), US Retail Sales (Aug) and Industrial Production (Aug), Import Prices (Aug), Atlanta Fed GDP, Canadian CPI (Aug), RBA's Hauser & ECB's Escriva, Supply from Germany, UK & US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

US Appeals Court declined to allow Trump to remove Federal Reserve Governor Cook; Cook can attend the FOMC's September 16th-17th meeting.US Senate voted 48-47 to confirm US President Trump's Fed nominee Miran to join the Fed board.European bourses opened flat but sentiment dipped a touch to display a mostly negative picture; US equity futures are modestly firmer; NVDA little moved on reports of “lukewarm” demand for its RTX6000D AI chip.DXY in the doldrums as the clock ticks down to the FOMC; GBP was little moved to an in-line Jobs Report.USTs are essentially flat into Retail Sales and supply; Bunds pressured following ZEW and a relatively soft German auction.Crude futures slip with reports of the 19th sanctions package delayed; XAU makes a fresh ATH.Looking ahead, US Retail Sales (Aug) and Industrial Production (Aug), Import Prices (Aug), Atlanta Fed GDP, Canadian CPI (Aug) & ECB's Escriva, Supply from the US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

For investors looking to make sense of housing-related assets amidst changes in Fed policy stance, our co-heads of Securitized Product Research Jay Bacow and James Egan offer their perspective on mortgage rates and the market.Read more insights from Morgan Stanley.----- Transcript ----- James Egan: Welcome to Thoughts on the Market. I'm Jim Egan, co-head of Securitized Products Research at Morgan Stanley.Jay Bacow: I'm Jay Bacow, the other co-head of Securitized Products Research at Morgan Stanley.Today we're talking about the Fed, mortgage rates and the implications to the housing market.It's Monday, September 15th at 11:30am in New York.Now Jim, the Fed is meeting on Wednesday, and both our economists and the market are expecting them to cut rates in this meeting – and continue to cut rates at least probably two more times in 2025, and multiple times in 2026. We've talked a lot about the challenges and the affordability in the U.S. homeowners' market, in the U.S. mortgage market.Before we get into what this could help [with] the affordability challenges, how bad is that affordability right now?James Egan: Sure. And as we've discussed on this podcast in the past, one of the biggest issues with the affordability challenges in the U.S. housing market specifically is how it's fed through to supply issues as the lock-in effect has kept homeowners with low 30-year mortgage rates from listing their homes.But just how locked in does the market remain today? The effective rate on the outstanding mortgage market, kind of the average of the mortgages outstanding, is below 4.25 percent. The prevailing rate for 30-year mortgages today is still over 6.25 percent, so we're talking about two full percentage points, 200 basis points outta the money.Jay Bacow: And that seems like a lot. Has it been that way in the past?James Egan: If we look at roughly 40 years of data ending in 2022, the market was only 100 basis points outta the money for eight individual quarters. The most it was ever out of the money was 135 basis points. We have now been more than 200 basis points out of the the money for three entire years, 12 consecutive quarters. So, this is very unprecedented in the past several decades.But Jay, our economists are calling for Fed cuts, the market's pricing in Fed cuts. How much lower is the mortgage rate going for these affordability equations?Jay Bacow: We actually don't think that the Fed cutting rates necessarily is going to cause the mortgage rate to come down at all. And one way we can think about this is if we look at it, the Fed has already cut rates 100 basis points over the past year, and since the Fed has cut rates 100 basis points in the past year, the mortgage rate is 25 basis points higher.James Egan: Okay, so if I'm not going to be looking at Fed funds for the path of mortgage rates going forward, I have two questions for you.One, what part of the Treasury term structure should I be looking at? And two, you talked about the market pricing in Fed cuts from here. What is the market saying about where those rates will be in the future?Jay Bacow: So, mortgage rates are much more sensitive to the belly of the Treasury curve. Call it the 5- and 10-year portions than Fed funds. They have a little bit of sensitivity to the third year note as well. And when we think about what the market is expecting those portions of the Treasury curve to do, I apologize, I'm going to have to nerd out. Fortunately, being a nerd comes very naturally to me.If you look at the spread between the 5- and the 10-year portion of the treasury curve, 10 years yield about 50 basis points more than the 5-year note. So, you think about it, an investor could buy a 10-year note now. Or they could buy a 5-year note now and then another 5-year note in five years, and they should expect to get the same return if they do either one.So, if they buy the 10-year note right now at 50 basis points above where the 5-year note is. Or they buy the 5-year note, right now, the 5-year note in five years would have to yield 100 basis points above to get the average to be the same. Well, if the 5-year note in five years is 100 basis points above where the 5-year note is right now, mortgage rates are also probably going to be higher in five years.James Egan: Okay, so that's not helping the affordability issues. What can be done to lower mortgage rates from here?Jay Bacow: Well, going back to my inner nerd, if you brought the 5- and 10-year Treasury yields down, that would certainly be helpful. But mortgage rates aren't just predicated on where the Treasury yields are.There's also a risk premium on top of that. And so, if the mortgage originators can sell those loans to other investors at a tighter spread, that would also help bring the rate down. And there are things that can be done on that front. So, for instance, if the capital requirements for investors to own those mortgages go down, that would certainly be helpful.You could try to incentivize investors in a number of different ways, that's one front. But in reality, a lot of these fees are already sort of stuck in place. So, there's only so much that can be done.Now, Jim, let's suppose. I am wrong. I've been wrong in the past. A lot of times with you. I thought the Patriots were gonna beat the Giants in both Super Bowls. Somehow Eli Manning proved me wrong.However, if the mortgage rate does come down, how much does it have to come down for housing activity to start picking up?James Egan: So, this is a question we get asked roughly six to seven times a day…Jay Bacow: How did Eli Manning beat the Patriots?James Egan: How far mortgage rates have to come down in order to really get housing sales started again. And because of the backdrop of today's housing and mortgage markets that we laid out at the top of this podcast, it's really difficult to empirically point to a mortgage rate and calculate this is where rates have to fall to.So, what we have been doing instead is looking at historic periods of affordability improvement, and seeing how much do we need to get that affordability ratio down to get a sustainable growth in sales volumes from here.Jay Bacow: All right. And how much do we have to get that affordability ratio down?James Egan: So, a sustainable increase; historically, we've needed about a 10 percent improvement in the affordability ratio…Jay Bacow: Alright, help me out here. I think about mortgage payments as more of a function of the rate level. So, if we're in the context of like 6.25, 6.5 right now, how far does the mortgage rate need to drop to get a 10 percent improvement? Assuming that there's no change in borrower's income or home prices.James Egan: In that world, we think you need about 100 basis point move. It would take the 30-year mortgage rate to call it, 5.5 percent.Jay Bacow: All right, so if mortgage rates go to 5.5 percent, then we're going to immediately see housing activity pickup.James Egan: That is not exactly what we're saying. What we've seen is the 10 percent improvement is enough to get sustainable growth in sales volumes. A year after you start to see that real improvement, the contemporaneous moves can be up, they can be down. Given what our economists are saying for the labor market going forward, what they're saying for growth in the United States, we do think you can see a little bit of contemporaneous growth.If you start to see that 100 basis point move in mortgage rates now, we think you'll get about a 5 percent increase in purchase volumes as we move through 2026 with the potential for upward inflection in 2027 from that 5 percent growth number – again, if we get that move in mortgage rates.Jay Bacow: Alright, so we expect the Fed to cut rates about 150 basis points over the next year and a half. It doesn't necessarily have to bring the mortgage rate down. But if the mortgage rate does go down to in the context of 5.5 percent, we should start to get a pickup in housing activity maybe the year after that.Jim, always a pleasure talking to you.James Egan: Pleasure talking to you too, Jay. And to all of you regularly hearing us out, thank you for listening to another episode of Thoughts on the Market.Jay Bacow: Please leave us a review or a like wherever you get this podcast and share your Thoughts on the Market with a friend or colleague today.James Egan: Go smash that subscribe button.

Daniel looks at more recent key drivers for Chinese equities, and how investors may position themselves in this contextSpeaker:   - Daniel Lam, Head of Equity Strategy, Standard Chartered Bank For more of our latest market insights, visit Market views on-the-go or subscribe to Standard Chartered Wealth Insights on YouTube.

APAC stocks traded mixed, with the region somewhat cautious as participants digested disappointing Chinese activity data.The lack of progress in US talks with China on tariffs and fentanyl is said to have reduced the chances of a Beijing summit, according to the FT.Fitch cut France's sovereign rating from AA- to A+; Outlook Revised to Stable from Negative; OATs -11 ticks.European equity futures indicate a slightly positive cash market open with Euro Stoxx 50 futures up 0.3% after the cash market closed with gains of 0.1% on Friday.In FX, DXY is steady and FX markets are contained heading into a week, which is set to be dominated by central bank activity.US President Trump said he is ready to impose major sanctions on Russia when all NATO nations have agreed and started to do the same thing, and when all NATO nations stop buying oil from Russia.Looking ahead, highlights include German Wholesale Price Index (Aug), NY Fed Manufacturing (Sep), Speakers including ECB's Schnabel, Rehn & Lagarde.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

US and China day two talks are underway; overnight, FT reported that there has been a lack of progress, potentially reducing the odds of a Beijing summit. Recently, US Treasury Secretary Bessent said the US and China made good progress on technical details.Crude benchmarks are higher amid a softer USD and after President Trump said he is ready to impose sanctions on Russia, once NATO stops buying Russian oil. Most recently, Russia's Kremlin says NATO is fighting Russia.NVIDIA hit in the pre-market, weighing on the NQ and broader sentiment, as China said NVIDIA violated antitrust laws; European bourses off best, but still firmer, Euro Stoxx 50 +0.6%.Fitch downgraded France to A+ (prev. AA-), sparking modest OAT-Bund widening though levels remain orderly. EUR is unreactive, GBP leads with the DXY softer.Gold had an initial upward bias with the focus on geopols, though off best. Base metals capped by soft Chinese data.Looking ahead, NY Fed Manufacturing (Sep), Speakers including ECB's Schnabel, Rehn & Lagarde.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Online crime is accelerating, making cybersecurity a fast-growing and resilient investment opportunity. Our Cybersecurity and Network and Equipment analyst Meta Marshall discusses the key trends driving this market shift.Read more insights from Morgan Stanley.----- Transcript ----- Welcome to Thoughts on the Market. I'm Meta Marshall, Morgan Stanley's Cybersecurity and Network and Equipment Analyst. Today – the future of digital defense against cybercrime. It's Friday, September 12th, at 10am in New York.Imagine waking up to find your bank account drained, your business operations frozen, or your personal data exposed – all because of a cyberattack. Today, cybersecurity isn't an esoteric tech issue. It impacts all of us, both as consumers and investors. As the digital landscape grows increasingly complex, the scale and severity of cybercrime expand in tandem. This means that even as companies spend more, the risks are multiplying even faster. For investors, this is both a warning and an opportunity.Cybersecurity is now a $270 billion market. And we expect it to grow at 12 percent per year through 2028. That's one of the fastest growth rates across software. And here's another number worth noting: Chief Information Officers we surveyed expect cybersecurity spending to grow 50 percent faster than software spending as a whole. This makes cybersecurity the most defensive area of IT budgets—meaning it's least likely to be cut, even in tough times.This hasn't been lost on investors. Security software has outperformed the broader market, and over the past three years, security stocks have delivered a 58 percent return, compared to just 22 percent for software overall and 79 percent for the NASDAQ. We expect this outperformance against software to continue as AI expands the number of ways hackers can get in and the ways those threats are evolving.Looking ahead, we see a handful of interconnected mega themes driving investment opportunities in cybersecurity. One of the biggest is platformization – consolidating security tools into a unified platform. Today, major companies juggle on average 130 different cyber security tools. This approach often creates complexity, not clarity, and can leave dangerous gaps in protection particularly as the rise of connected devices like robots and drones is making unified security platforms more important than ever.And something else to keep in mind: right now, security investments make up only 1 percent of overall AI spending, compared to 6 percent of total IT budgets—so there's a lot of room to grow as AI becomes ever more central to business operations. In today's cybersecurity race, it's not enough to simply pile on more tools or chase the latest buzzwords. We think some of the biggest potential winners are cybersecurity providers who can turn chaos into clarity. In addition to growing revenue and free cash flow, these businesses are weaving together fragmented defenses into unified, easy-to-manage platforms. They want to get smarter, faster, and more resilient – not just bigger. They understand that it's key to cut through the noise, make systems work seamlessly together, and adapt on a dime as new threats emerge. In cybersecurity, complexity is the enemy—and simplicity is the new superpower. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

US Treasury Secretary Bessent will meet with Chinese Vice Premier He and other senior Chinese officials next week in Madrid, while Bessent and He are to discuss key US-China national security, economic and trade issues.US equity futures are lower across the board, RTY lags. European bourses began marginally firmer, but have since waned.USD attempts to recover from the pressure seen on Thursday's data, DXY at highs, while the JPY lags.Fixed income is in the red, though USTs are set to end the week near-enough unchanged. Gilts are the relative outperformer post-GDP.Crude began in the red, extending to a new WTD low before bouncing and recouping some of Thursday's pressure. Metals firmer despite the USD strength.Looking ahead, highlights include US University of Michigan Prelim (Sep), CBR Announcement, Credit Rating Reviews for France & Spain. US President Trump on Fox.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

US Treasury Secretary Bessent will meet with Chinese Vice Premier He and other senior Chinese officials next week in Madrid, while Bessent and He are to discuss key US-China national security, economic and trade issues.US President Trump's administration asked the US appeals court to pause a ruling that blocked the removal of Fed's Cook.ECB rate cut debate is said to not be over, but October is seen as too soon, and the next real discussion is more likely in December, according to Reuters sources.APAC stocks were mostly higher following the gains on Wall St; European equity futures indicate a marginally positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 0.5% on Thursday.Looking ahead, highlights include German CPI Final (Aug), UK GDP (Jul), French Final CPI (Aug), Spanish Final CPI (Aug), US University of Michigan Prelim (Sep), CBR Announcement, ECB Publication of ECB staff macroeconomic projections for the euro area, Credit Rating Reviews for France & Spain.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Our Chief Asia Economist Chetan Ahya discusses how the evolving trade relationship between India and China could redefine global supply chains and unlock new investment opportunities.Read more insights from Morgan Stanley.----- Transcript ----- Welcome to Thoughts on the Market. I'm Chetan Ahya, Morgan Stanley's Chief Asia Economist. Today – one of the most important economic relationships of our time: India and China. And what the future may hold. It's Thursday, September 11th at 2 pm in Hong Kong.Trade dynamics between India and China are evolving rapidly. They are not just shaping their own futures. They are influencing global supply chains and investment flows. India's trade with China has nearly doubled in the last decade. India's bilateral trade deficit with China is its largest—currently at U.S. $120 billion. On the flip side, China's trade surplus with India is the biggest among all Asian economies. We expect this trade relationship to deepen given economic imperatives. India needs support on tech know-how, capital goods and critical inputs; and China needs to capitalize on growth opportunities in the second largest and fastest growing EM. Let's explore these issues in turn. India needs to integrate itself into the global value chain. And to do that, India needs Foreign Direct Investment from China, much like how China's rise was fueled by Foreign Direct Investment from the U.S., Europe, Japan, and Korea, which brought the technology and expertise. For India, easing restrictions on Chinese FDI could be a game-changer, enabling the transfer of tech know-how and boosting manufacturing competitiveness. Now, China is the world's manufacturing powerhouse. It accounts for more than 40 percent of the global value chain—far ahead of the U.S. at 13 percent and India at just 4 percent. The global goods trade is increasingly focused on products higher up the value chain—think semiconductors, EVs, EV batteries, and solar panels. And China is the top global exporter in six of eight key manufacturing sectors. To put it quite simply, any economy that is looking to increase its participation in global value chains will have to increase its trade with China. For India, this means that it must rely on Chinese imports to meet its increasing demand for capital goods as well as critical inputs that are necessary for its industrialization. In fact, this is already happening. More than half of India's imports from China and Hong Kong are capital goods—i.e. machinery and equipment needed for manufacturing and infrastructure investment. Industrial supplies make [up] another third of the imports, highlighting India's dependence on China for critical inputs. From China's perspective, India is the second largest and fastest-growing emerging market. And with U.S.-China trade tensions persisting, China is diversifying its exports markets, and India represents a significant opportunity. One way Chinese companies can capture this growth opportunity is to invest in and serve the domestic market. Chinese mobile phone companies have already been doing this and whether this can broaden to other sectors will depend on the opening up of India's markets. To sum up, India can leverage on China's strengths in manufacturing and technology while China can utilize India's vast market for exports and investment.However, there's a caveat: geopolitics. While economic imperatives point to deeper trade and investment ties, political developments could slow progress. Investors should watch this space closely and we will keep you updated on key developments. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

Equities and Bonds Rally Amid CPI and Employment Data; Reflecting on September 11 In this episode of Dividend Cafe, Brian Szytel reports from West Palm Beach, Florida on the positive movements in equity and bond markets, with the DOW, S&P, and NASDAQ showing significant gains. He also covers recent economic data, including the CPI and jobless claims, and their implications for Fed rate adjustments. Additionally, Brian shares a personal reflection on the 24th anniversary of the September 11 attacks, highlighting the collective memory and tribute to those affected. 00:00 Introduction and Market Overview 00:15 Equity and Bond Market Rally 00:47 Inflation and Employment Data Insights 01:33 Federal Reserve Rate Expectations 01:57 Jobless Claims and Fed Policy 03:05 Valuations and Market Sentiment 03:51 Reflecting on September 11th 05:04 Conclusion and Upcoming Content Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

APAC stocks followed suit to the mixed performance stateside, where the S&P 500 and Nasdaq printed fresh record highs.US President Trump's administration appealed the court ruling blocking the removal of Fed Governor Cook.US Senate Republicans are aiming to confirm President Trump's temporary Federal Reserve pick Stephen Miran as soon as Monday, according to Politico, citing two sourcesEU is reportedly very unlikely to impose crippling tariffs on India or China, the main buyers of Russian oil, as US President Trump urged the bloc to do so, according to Reuters citing EU sources.European equity futures indicate a flat cash market open with Euro Stoxx 50 futures U/C after the cash market closed with losses of 0.1% on Wednesday.Looking ahead, highlights include US CPI (Aug) & Jobless Claims, ECB Policy Announcement & Press Conference, CBRT Announcement, IEA & OPEC Monthly Report, Supply from Italy and the US, and Earnings from Adobe.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

European bourses are modestly firmer, whilst US equity futures are mixed ahead of the ECB and US CPI.DXY is firmer and towards session highs; JPY underperforms, with USD/JPY rising to just shy of the 148.00 mark.USTs and Bunds are a touch softer into ECB/US CPI and a 30-year auction following a strong 3- and 10-year outing earlier this week.Industrial commodities and gold are subdued, awaiting key risk events; some modest upticks seen on Poland, Ukraine & Lithuania, calling the recent Russian drone incursion an “unprecedented” provocation.Looking ahead, US CPI (Aug) & Jobless Claims, ECB Policy Announcement & Press Conference, CBRT Announcement, OPEC Monthly Report, Supply from the US, and Earnings from Adobe.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Our Metals & Mining Commodity Strategist Amy Gower discusses her bullish outlook for gold and what the metal's rally in 2025 says about inflation, central banks, and global risk.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Amy Gower, Morgan Stanley's Metals & Mining Commodity Strategist. Today, we're talking about gold, a metal that's more than just a safe haven for investors, and what it tells us about the global economy and markets right now.It's Wednesday, September 10th, at 3pm in London. Gold has always been the go-to asset in times of uncertainty. But in 2025, its role is evolving. Investors are watching gold not just as a hedge against inflation, but as a barometer for everything from central bank policy to geopolitical risk. When gold prices move, it's often a sign that something big is happening beneath the surface.Gold and silver have both already clocked up hefty year-to-date gains of 39 and 42 percent respectively. So, what's been driving this rally? Well, several factors stand out. For one, central banks are on track for another year of strong buying, with gold now representing a bigger share of central bank reserves than treasuries for the first time since 1996. This is a strong vote of confidence in gold's long-term value. Also, gold-backed Exchange-Traded Funds, or ETFs, saw inflows of $5 billion in August alone, with the year-to-date inflows the highest on record outside of 2020, signaling renewed interest from institutional investors too. With inflation still above target in many major economies, gold's appeal has been surprisingly resilient despite being a non-yielding asset. And investors are betting that central banks may soon have to cut rates, which could further boost gold prices. In fact, from here we see around 5 percent further upside to gold by year end to $3800/oz which would be a new all-time high. But there is one important wrinkle to consider. Keep in mind that while precious metals, especially gold, are primarily seen as a hedge and safe haven in times of macro uncertainty, jewelry is a big chunk of the overall precious metals market. It accounts for 40 percent of gold demand and 34 percent of silver demand. And right now how jewelry demand will evolve remains an unknown. In fact, jewelry demand is already showing signs of weakness. Second-quarter gold jewelry demand was the worst since the third quarter of 2020 as consumers reacted to high prices. Nonetheless, gold was able to hold onto its January-April gains, and silver continued to grind higher, supported by strong demand from the solar industry as well. However, until recently, the two metals were lacking catalysts for further gains. Now though this is changing, with both gold and silver poised to benefit from expected Fed rate cuts. Our economists expect the Fed to cut rates at the September meeting, for the first time since December 2024. And if we look back to the 1990s, on average gold and silver prices have risen 6 and 4 percent respectively in the 60 days following the start of a Fed rate-cutting cycle as lower yields make it easier for non-yielding assets to compete. Our FX strategists also expect further dollar weakness, which should ease some of the price pressures for holders of non-USD currencies, while India's imports of gold and silver already showed signs of improvement in July. The country is looking also to reform its Goods and Services tax, which could free up purchasing power for gold and silver ahead of festival and wedding season. Gold does tend to outperform after Fed rate cuts, and we would keep the preference for gold over silver, but our outlook for both metals remains positive. Of course, precious metals are not risk-free. Prices can be volatile, and if central banks surprise the market with higher interest rates, gold in particular could lose some of its luster. But for now, both gold and silver should continue to shine. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

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You may be missing the biggest bull market right now. Today we share how you can make sure you're a part of it. We talk market trends as we hit September, which has historical weakness for stocks and the tendency for markets to defy consensus expectations. Equities and commodities like oil and natural gas have been lackluster, gold has quietly entered a strong bull market, driven largely by central bank buying rather than retail investors. Investor psychology, price action, and historical cycles shape opportunities in gold and silver markets. We also talk about cultural and global perspectives, noting that Americans tend to favor stocks and dollars over gold. We discuss... September was noted as historically one of the weakest months for stocks, often followed by a rebound later in the year. Markets often defy consensus expectations, meaning heavy selling sentiment could set up a surprise rally. Gold has entered a strong bull market, driven by consistent central bank buying rather than retail investors. Silver has lagged behind gold but is positioned for a potential breakout as individual investors enter the market. Precious metals tend to move in cycles, with gold leading, then silver, followed by miners and junior miners. Mining stocks can outperform in bull markets but generally have poor business models and higher risks. Central banks' distrust of the financial system underpins their growing gold accumulation. Kirk emphasized that gold miners, though risky and often unprofitable, can deliver exponential upside in bull markets. Junior miners were described as the most volatile and speculative plays, offering high risk and high reward. Futures markets were highlighted as distorting bullion's true value and price signals. Central banks are steadily accumulating gold instead of treasuries, signaling waning trust in U.S. debt. U.S. bonds are losing their safe-haven status compared to previous cycles. Political uncertainty, including figures like Trump, adds to market unpredictability. Diversification was stressed as key, since risks are already embedded across today's financial markets.   Today's Panelists: Kirk Chisholm | Innovative Wealth Douglas Heagren | Mergent College Advisors Follow on Facebook: https://www.facebook.com/moneytreepodcast Follow LinkedIn: https://www.linkedin.com/showcase/money-tree-investing-podcast Follow on Twitter/X: https://x.com/MTIPodcast For more information, visit the show notes at https://moneytreepodcast.com/the-biggest-bull-market-right-now-745 

Poland said its airspace was repeatedly violated by drones during today's attack by Russia on Ukraine; Poland shot down Russian drones after 'unprecedented airspace violation'.US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war.US judge temporarily blocked President Trump from removing Federal Reserve Governor Cook.French President Macron appointed Sebastien Lecornu as new PM, according to BFM.European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 0.1% on Tuesday.Looking ahead, highlights include Norwegian CPI (Aug), US PPI (Aug), Wholesale Sales (Jul), Comments from SNB's Schlegel, Supply from UK, Germany & US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Poland said its airspace was repeatedly violated by drones during today's attack by Russia on Ukraine; Poland shot down Russian drones after 'unprecedented airspace violation'. Polish PM Tusk says Poland asked to evoke Article 4 of NATO treaty.US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war.US judge temporarily blocked President Trump from removing Federal Reserve Governor Cook.European bourses started off stronger, but then slipped after Polish PM asks to evoke Article 4; Oracle +29% post-earnings.DXY is incrementally lower whilst Antipodeans lead.Bunds briefly bolstered by NATO remarks. Complex awaits US data and supply.Crude and gold rise as NATO member Poland downs drones above its territory.Looking ahead, US PPI (Aug), Wholesale Sales (Jul), Comments from SNB's Schlegel, Supply from US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Stocks in the US hit another all-time high on expectations that the Federal Reserve will fight the slowdown in jobs growth with interest rate cuts. US inflation data out today and tomorrow will be the next test for markets. The Anglo/Teck ‘merger-of-equals' creates a premier global player in copper and critical minerals. Today, we are joined by Mathieu Racheter, Head of Equity Strategy, who explains why he believes markets will grind higher into year-end, and Tim Gagie, Head of FX/PMPrivate Banking Sales Geneva, who shares his current insights on currencies and metals markets.(00:00) - Introduction: Helen Freer, Product & Investment Content (00:35) - Markets wrap-up: Roman Canziani, Head of Product & Investment Content (07:39) - Equity market update: Mathieu Racheter, Head of Equity Strategy Research (13:03) - FX and metals: Tim Gagie, Head of FX/PM PB Geneva (17:14) - Closing remarks: Helen Freer, Product & Investment Content Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.

Many Americans struggle with the rising cost of healthcare. Analysts Terence Flynn and Erin Wright explain how AI might bend the cost curve, from Morgan Stanley's 23rd annual Global Healthcare Conference in New York.Read more insights from Morgan Stanley.----- Transcript -----Terence Flynn: Welcome to Thoughts on the Market. I'm Terence Flynn, Morgan Stanley's U.S. Biopharma Analyst.Erin Wright: And I'm Erin Wright, U.S. Healthcare Services Analyst.Terence Flynn: Thanks for joining us. We're actually in the midst of the second day of Morgan Stanley's annual Global Healthcare Conference, where we hosted over 400 companies. And there are a number of important themes that we discussed, including healthcare policy and capital allocation.Now, today on the show, we're going to discuss one of these themes, healthcare spending, which is one of the most pressing challenges facing the U.S. economy today.It is Tuesday, September 9th at 8am in New York.Imagine getting a bill for a routine doctor's visit and seeing a number that makes you do a double take. Maybe it's $300 for a quick checkup or thousands of dollars for a simple procedure.For many Americans, those moments of sticker shock aren't rare. They are the reality.Now with healthcare costs in the U.S. higher than many other peer countries on a percentage of GDP basis, it's no wonder that everyone – not just investors – is asking; not just, ‘Why is this happening?' But ‘How can we fix it?' And that's why we're talking about AI today. Could it be the breakthrough needed to help rein in those costs and reshape how care is delivered?Now I'm going to go over to you, Erin. Why is U.S. healthcare spending growing so rapidly compared to peer countries?Erin Wright: Clearly, the aging population in the U.S. and rising chronic disease burden here are clearly driving up demand for healthcare. We're seeing escalating demand across the senior population, for instance. It's coinciding with greater utilization of more sophisticated therapeutics and services. Overall, it's straining the healthcare system.We are seeing burnout in labor constraints at hospitals and broader health systems overall. Net-net, the U.S. spent 18 percent of GDP on healthcare in 2023, and that's compared to only 11 percent for peer countries. And it's projected to reach 25 to 30 percent of GDP by 2050. So, the costs are clearly escalating here.Terence Flynn: Thanks, Erin. That's a great way to frame the problem. Now, as we think about AI, where does that come in to help potentially bend the cost curve?Erin Wright: We think AI can drive meaningful efficiencies across healthcare delivery, with estimated savings of about [$]300 to [$]900 billion by 2050.So, the focus areas include here: staffing, supply chain, scheduling, adherence. These are where AI tools can really address some of these inefficiencies in care and ultimately drive health outcomes. There are implementation costs and risks for hospitals, but we do think the savings here can be substantial.Terence Flynn: Great. Well, let's unpack that a little bit more now. So, if you think about the biggest cost buckets in hospitals, where can AI help out?Erin Wright: The biggest cost bucket for a hospital today clearly is labor. It represents about half of spend for a hospital. AI can optimize staffing, reduce burnout with a new scribe and some of these scribe technologies that are out there, and more efficient healthcare record keeping. I mean, this can really help to drive meaningful cost savings.Just to add another discouraging data point for you, there's estimated to be a shortage of about 10,000 critical healthcare workers in 2028. So, AI can help to address that. AI tools can be used across administrative functions as well. That accounts for about 15 to 20 percent of spend for a hospital. So, we see substantial savings as well across drugs, supplies, lab testing, where AI can reduce waste and improve adherence overall.Terence Flynn: Great. Maybe we'll pivot over to the managed care and value-based care side now. How is AI being used in these verticals, Erin?Erin Wright: For a healthcare insurer – and they're facing many challenges right now as well – AI can help personalize care plans. And they can support better predictive analytics and ultimately help to optimize utilization trends. And it can also help to facilitate value-based care arrangements, which can ultimately drive better health outcomes and bend the cost curve. And ultimately that's the key theme that we're trying to focus on here.So, I'll turn it over to you, Terence, now. While hospitals and payers could see notable benefits from AI, the biopharma side of the equation is just as critical here. Especially when it comes to long-term cost containment. You've been closely tracking how AI is transforming drug development. What exactly are you seeing?Terence Flynn: Yeah, a number of key constituents are leaning in here on AI in a number of different ways. I'd say the most meaningful way that could help bend the cost curve is on R&D productivity. As many people probably know, it can take a very long time for a drug to reach the market anywhere from eight to 10 years. And if AI can be used to improve that cycle time or boost the probability of success, the probability of a drug reaching the market – that could have a meaningful benefit on costs. And so, we think AI has the potential to increase drug approvals by 10 to 40 percent. And if that happens, you can ultimately drive cost savings of anywhere from [$]100 billion to [$]600 billion by 2050.Erin Wright: Yeah, that sounds meaningful. How do you think additional drug approvals lead to meaningful cost savings in the healthcare system?Terence Flynn: Look, I mean, high level medicines at their best cure disease or prevent people from being admitted to a hospital or seeking care to doctor's office. Equally important medicines can get people out of the hospital quicker and back to contributing or participating in society. And there's data out there in the literature showing that new drugs can reduce hospital stays by anywhere from 11 to 16 percent.And so, if you think about keeping people out of hospitals or physician offices or reducing hospital stays, that really can result in meaningful savings. And that would be the result of more or better drugs reaching the market over the next decades.Erin Wright: And how is the FDA now supporting or even helping to endorse AI driven drug development?Terence Flynn: If companies are applying for more drug approvals here as a result of AI discovery capabilities without modernization, the FDA could actually become the bottleneck and limit the number of drugs approved each year.And so, in June, the agency rolled out an AI tool called Elsa that's looking to improve the drug review timelines. Now, Elsa has the potential to accelerate these timelines for new therapies. It can take anywhere from six to 10 months for the FDA to actually approve a drug. And so, these AI tools could potentially help decrease those timelines.Erin Wright: And are you actually seeing some of these biopharma companies actually investing in AI talent?Terence Flynn: Yes, definitely. I mean, AI related job postings in our sector have doubled since 2021. Companies are increasingly hiring across the board for a number of different, parts of their workflow, including discovery, which we just talked about. But also, clinical trials, marketing, regulatory – a whole host of different job descriptions.Erin Wright: So, whether it's optimizing hospital operations or accelerating drug discovery, AI is emerging as a powerful lever here – to bend the healthcare cost curve.Terence Flynn: Exactly. The challenge is adoption, but the potential is transformative. Erin, thanks so much for taking the time to talk with us.Erin Wright: Great speaking with you, Terence.Terence Flynn: And thanks everyone for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.

Fiscal policy shifts, from taxes to tariffs, are steering global capital and trade flows. The US, for instance, is attracting investments despite the tariff headlines—illustrating how the impact of these policies continues to evolve. In a dynamic policy environment, taxes and tariffs could create new implications for asset classes, sectors, and market structures.  This episode of The Outthinking Investor explores macro implications from taxes and tariffs, how policy changes are shaping the way investors allocate capital, and why economic growth could be more resilient against higher tariffs than in the past.  Our guests are: Douglas Holtz-Eakin, President of the American Action Forum and former Director of the Congressional Budget Office Kimberly Clausing, professor of tax law and policy at UCLA School of Law and former lead economist in the US Treasury's Office of Tax Policy Jeffrey Young, Head of Investment Strategy for PGIM's quant team Do you have any comments, suggestions, or topics you would like us to cover? Email us at thought.leadership@pgim.com, or fill out our survey at PGIM.com/podcast/outthinking-investor. To hear more from PGIM, tune into Speaking of Alternatives, available on Spotify, Apple, Amazon Music, and other podcast platforms. Explore our entire collection of podcasts at PGIM.com.

French PM Bayrou lost the confidence vote in the National Assembly, as expected; French President Macron said he will name a new PM in the coming days.UK Chancellor Reeves is to tell ministers to prioritise the fight against inflation in a Cabinet meeting today, according to FT.US Senate Banking panel to vote on Miran's Fed nomination on September 10th, according to Bloomberg.European equity futures indicate a marginally lower cash market open with Euro Stoxx 50 futures down 0.4% after the cash market closed with gains of 0.8% on Monday.Looking ahead, highlights include French Industrial Output, US NFP Prelim. Benchmark Revisions, Apple Event, Comments from BoE's Breeden, Supply from Netherlands, UK, Germany & US.Click for the Newsquawk Week Ahead.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Global equity futures are modestly mixed; Anglo American & Teck merge to create a USD 50bln mining giant.USD is a little lower whilst JPY soars amid hawkish BoJ reports.OAT-Bund 10yr spread a little wider in the aftermath of French PM Bayrou's removal, JGBs hit by BoJ sources.BoJ reportedly sees some chance of hiking this year, despite the political situation, via Bloomberg citing sources; likely to keep rates unchanged on September 19thCrude rebounds and metals non-committal awaiting the next impetus.Looking ahead, US NFP Prelim. Benchmark Revisions, Apple Event, Comments from BoE's Breeden, Supply from the US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Asian stocks climbed for a fourth day on Tuesday as Wall Street's upbeat mood ahead of expected Federal Reserve rate cuts flowed into regional trading. MSCI's Asia-Pacific equities gauge reached its highest level since February 2021 with tech firms like Taiwan Semiconductor and Alibaba Group contributing most to the gains. Shares in Japan, South Korea and Hong Kong rose, while those in Australia declined. The moves followed a surge in bets on rate cuts by the US central bank that pushed stocks near record highs on hopes that easier policy will bolster corporate America. We look at the market landscape with Carol Schleif, Chief Market Strategist at BMO Private Wealth.In Japan, the implications of the nation's latest political turmoil have spilled into markets. The Nikkei 225 advanced to touch a new intraday record high in the morning. The country's government bonds were firmer after having slumped Monday as Prime Minister Shigeru Ishiba's decision to step down underscored expectations for looser fiscal policy. Bloomberg Opinion Columnist Gearoid Reidy joins with insight on the road ahead for Japan's ruling bloc.See omnystudio.com/listener for privacy information.

Morgan Stanley's CIO and Chief U.S. Equity Strategist Mike Wilson discusses the outlook for U.S. stocks after Friday's nonfarm payroll data reinforced the thesis of a transition from a rolling recession to a rolling recovery.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Mike Wilson, Morgan Stanley's CIO and Chief U.S. Equity Strategist. Today on the podcast I'll be discussing Friday's Payroll report and what it means for equities. It's Monday, Sept 8th at 11:30am in New York. So let's get after it. The heavily anticipated nonfarm payroll report on Friday supports our view that the labor market is weak. However, this is old news to the equity market as we have been discussing for months. First, the labor market data is perhaps the most backward-looking of all the economic series. Second, it's particularly prone to major revisions that tend to make the current data unreliable in real time, which is why the National Bureau of Economic Research typically declares a recession started at a time when most were unaware we were in one. Furthermore, history suggests these revisions are pro-cyclical, meaning they get more negative going into a recession and then more positive once the recovery's begun. It appears this time is no different. Indeed, Friday's revisions were better than last month's by a wide margin suggesting the labor market bottomed in the second quarter. This insight adds support to our primary thesis on the economy and markets that I have been maintaining for the past several years. More specifically, I believe a rolling recession began in 2022 and finally bottomed in April with the tariff announcements made on “Liberation Day.” After the initial phase of this rolling recession, that was led by a payback in Covid pull-forward demand in tech and consumer goods, other sectors of the economy went through their own individual recessions at different times. This is a key reason why we never saw the typical spike in the metrics used to define a traditional recession, although the revisions data is now revealing it more clearly. The historically significant rise in immigration post-covid and subsequent enforcement this year have also led to further distortions in many of these labor market measures. While we have written about these topics extensively over the past several years, Friday's weak labor report provides further evidence of our thesis that we are now transitioning from a rolling recession to a rolling recovery. In short, we're entering a new cycle environment and the Fed cutting interest rates will be key to the next leg of the new bull market that began in April. Central to our view is the notion that the economy has been much weaker for many companies and consumers over the past 3 years than what the headline economic statistics like nominal GDP or employment suggest. We think a better way to measure the health of the economy is earnings growth, and breadth; as well as consumer and corporate confidence surveys. Perhaps the simplest way to determine if an economy is doing well or not is to ask: is it delivering prosperity broadly? On that score, we think the answer is “no” given the fact that earnings growth has been negative for most companies over the past 3 years. The good news is that growth has finally entered positive territory the past 2 quarters. This coincides with the v-shaped recovery in earnings revisions breadth we have been highlighting for months. We think this supports the notion that the worst of the rolling recession is behind us and likely troughed in April. As usual, equity markets got this right and bottomed then, too. Now, we think a proper rate cutting cycle is likely and necessary for the next leg of this new bull market. Given the risk that the Fed may still be focused on inflation more than the weakness in the lagging labor market data, rate cuts may materialize more slowly than what equity investors want. Combined with some signs that liquidity may be drying up a bit as both corporate and Treasury issuance increases, it would not surprise me if equity markets go through some consolidation or even a correction during the seasonally weak time of the year. Should that happen, we would be buyers of that dip and likely even consider moving down the quality curve in anticipation of a more dovish Fed and coordinated action with the Treasury. Bottom line, a new bull market for equities began with the trough in the rolling recession that began in 2022. It's still early days for this new bull which means dips should be bought. Thanks for tuning in; I hope you found it informative and useful. Let us know what you think by leaving us a review. And if you find Thoughts on the Market worthwhile, tell a friend or colleague to try it out!

9月5日金曜日発表の非農業部門雇用者数は、米国経済がローリング・リセッションからローリング・リカバリーに移行しているとの見方を裏付ける内容でした。では、米国株は今後どうなるのか。弊社の最高投資責任者兼米国チーフ株式ストラテジスト、マイク・ウィルソンが見通しをお話しします。このエピソードを英語で聴く。トランスクリプト 「市場の風を読む」（Thoughts on the Market）へようこそ。このポッドキャストでは、最近の金融市場動向に関するモルガン・スタンレーの考察をお届けします。本日は、先日発表された雇用統計と、米国株にとってのその意味について、弊社の最高投資責任者兼米国チーフ株式ストラテジストのマイク・ウィルソンがお話しします。このエピソードは9月8日 にニューヨークにて収録されたものです。英語でお聞きになりたい方は、概要欄に記載しているURLをクリックしてください。大いに注目されていた9月5日金曜日発表の非農業部門雇用者数は、労働市場は弱いという弊社の見立てを裏付ける内容でした。しかし、弊社は何ヵ月も前からこのことを論じており、株式市場にとっては言わば古いニュースです。第1に、ひょっとしたら雇用統計は最も後ろ向きな、つまり過去に目を向けている経済指標かもしれません。第2に、この統計は大幅に改定されることが特に多く、リアルタイムでは最新のデータが当てにならない傾向があります。全米経済研究所(NBER)が景気後退の始まりを宣言するころには、ほとんどの人が景気後退期にあることを意識しなくなっているのが普通であるのはそのためです。また過去の実績からは、非農業部門雇用者数の改定がプロシクリカルであることがうかがえます。景気後退に向かっている局面では下方修正の幅が大きくなりがちで、景気回復が始まれば上方修正の幅が大きくなりがちだという意味です。今回もこのパターンに沿っているように見えます。実際、金曜日の改定は前月のそれより大幅に良い内容であり、労働市場が第2四半期に「底を打った」ことを示唆しています。このことは、私が何年も前からお話ししている、景気と市場に対する弊社の基本的な説を裏書きしてくれます。 具体的に言えば、米国では2022年に「ローリング・リセッション」が始まり、今年4月の「解放の日」に相互関税が発表されたことをもってようやく底を打ったと私は考えています。このローリング・リセッションの初期段階は、新型コロナによるハイテク製品や消費財の需要前倒しの反動が主導する形で進みましたが、やがて他のセクターもそれぞれ異なるタイミングで不況に突入していきました。従来型のリセッションの判定に用いられる指標で典型的な変化が観察されなかったのに、今になってそれらの改定値で変化がより明確になっているのは、それが主な理由です。新型コロナ後に移民の流入が歴史的な大幅増になったことと、今年になってその取り締まりが行われていることも、労働市場の多くの指標をさらにゆがめることになりました。弊社はここ数年、こうした話題を広く取り上げてきましたが、金曜日に発表された弱い雇用統計は、米国経済がローリング・リセッションから「ローリング・リカバリー」に移行しつつあるという弊社の説を裏付ける証拠だと言えます。つまり、景気は新たな循環に入りつつあり、4月に始まった新しい強気相場が今後どこまで続くかについてはFRBの利下げがカギを握ることになるでしょう。弊社の見解で何よりも重要なのは、過去3年間の景気は多くの企業や消費者にとって、GDPや雇用のような総合的な経済統計が示唆するものよりはるかに弱かったということです。景気の強さを測る際には、消費者や企業の景況感調査に加え、企業の利益成長とその広がり方に着目する方がよいと弊社ではみています。ひょっとしたら、景気の良し悪しを判断する最もシンプルな方法は、今の景気は幅広い層に繁栄をもたらしているのかと問うことかもしれません。この物差しに照らして言うなら、答えは「ノー」だと弊社では考えます。ここ3年間はほとんどの企業で利益がマイナス成長になっているからです。ただ、良い知らせがあります。過去2四半期では、この利益成長がようやくプラスに転じているのです。そして同時に、ここ数ヵ月間弊社が強調してきたように、企業の業績見通しのV字回復も広がりを見せています。このことも、ローリング・リセッションが最悪期を脱したこと、おそらく「谷」は4月だったことを裏付けていると思われます。株式市場はいつものようにこれを正確に把握し、底を打ったのです。さて、これから本物の利下げサイクルが始まる公算が大きく、この新たな強気相場が続くためにはそのような利下げが必要だと弊社ではみています。ただ、FRBは遅行指標である労働市場のデータの弱さよりもインフレの方をまだ重視している可能性があり、利下げは株式投資家の願望よりも緩やかなペースで進むことになるかもしれません。また、企業と財務省の両方が資金調達を増やすために流動性資金が少し干上がるかもしれない兆しもあることから、株価が軟調になりやすい季節に相場が一服したり、さらに進んで調整したりしても、私は驚かないでしょう。もしそうなったら、弊社なら押し目買いに入るでしょうし、FRBがさらにハト派的になることや財務省と連携することも見込んで、クオリティで劣る銘柄にも物色の幅を広げることすら検討するかもしれません。結論を申し上げれば、2022年に始まったローリング・リセッションの底打ちをもって、株式市場では新しい強気相場が始まりました。この相場はまだ初期段階にあり、株価の下落には押し目買いで臨むべきです。最後までお聴きいただきありがとうございました。今回も「市場の風を読む」Thoughts on the Market 、お楽しみいただけたでしょうか？もしよろしければ、この番組について、ご友人や同僚の皆さんにもシェアいただけますと幸いです。

In this week's episode of the Coin Stories News Block powered exclusively by Ledn, we cover these major headlines related to Bitcoin, macroeconomics, and global finance: Poor Jobs Data Cements Case for Rate Cuts DOJ Launches Criminal Investigation into Fed Governor Gold Hits New Record High Dalio: “Bad debt situations contributing to Bitcoin's rise"  SEC/CFTC Issue Joint Statement to Enable Spot Crypto Trading Strategy Snubbed by S&P 500  —- The News Block is powered exclusively by Ledn – the global leader in Bitcoin-backed loans, issuing over $9 billion in loans since 2018, and they were the first to offer proof of reserves. With Ledn, you get custody loans, no credit checks, no monthly payments, and more. My followers get .25% off their first loan. Learn more at www.ledn.io/natalie  ---- Read every story in the News Block with visuals and charts! Join our mailing list and subscribe to our free Bitcoin newsletter: https://thenewsblock.substack.com  ---- References mentioned in the episode: U.S. Unemployment Rate Near Four-Year High U.S. Jobs Report Cements Case for Fed Rate Cut Americans Losing Faith in the American Dream DOJ Opens Investigation into Fed's Lisa Cook  Ray Dalio's Financial Times Interview  Gold Hits New All-time High, Above $3,600 Charlie Bilello's Chart on Gold's Performance U.S. Bank Resumes Cryptocurrency Custody Service SEC and CFTC Joint Statement on Digital Assets  Robinhood, AppLovin, and EMCOR Join S&P 500 Strategy Gets Snubbed by S&P 500 Committee  Matt Cole's Tweet on S&P 500 Committee Michael Saylor's Tweet on S&P 500  Nasdaq Increases Scrutiny on Crypto Treasury Companies Strategy's Tweet in Response to Nasdaq Report Scott Johnsson's Tweet on Impact of Nasdaq Report New Bitcoin Treasury Company Launches in Amsterdam River's Business Bitcoin Adoption in 2025 Report  Coin Stories Interview with Jeff Park ---- Upcoming Events: Bitcoin 2026 will be here before you know it. Get 10% off Early Bird passes using the code HODL: https://tickets.b.tc/event/bitcoin-2026?promoCodeTask=apply&promoCodeInput=  Your Bitcoin oasis awaits at Camp Nakamoto: A retreat for Bitcoiners, by Bitcoiners. Code HODL for discounted passes: https://massadoptionbtc.ticketspice.com/camp-nakamoto      ---- This podcast is for educational purposes and should not be construed as official investment advice. ---- VALUE FOR VALUE — SUPPORT NATALIE'S SHOWS Strike ID https://strike.me/coinstoriesnat/ Cash App $CoinStories #money #Bitcoin #investing

Japanese PM Ishiba said he has decided to resign as LDP president and gave instructions to hold an emergency LDP leadership election; LDP is making final arrangements for a leadership vote on October 4th, according to TBS.US President Trump said Waller, Warsh and Hassett are the three finalists for the Fed chair nomination.US-China trade talks have reportedly made little progress towards a deal, and an impasse was hit on the fentanyl issue, according to WSJ.European bourses hold a positive bias, whilst US equities futures are incrementally firmer/flat.JPY lags as Japanese PM Ishiba resigns, EUR eyes the French PM's confidence vote later today.USTs/Bunds are essentially flat; more focus on Japan's emergency LDP election; OATs await France.Crude gains post OPEC and amid geopolitics; Gold soars to another ATH.Eight OPEC+ members agreed to raise the oil production by 137k bpd in October (as touted), citing a steady global economic outlook and current healthy market fundamentals.Looking ahead, US Employment Trends (Aug), NY Fed SCE & French Confidence Vote.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Japanese PM Ishiba said he has decided to resign as LDP president and gave instructions to hold an emergency LDP leadership election; LDP is making final arrangements for a leadership vote on October 4th, according to TBS.US President Trump said Waller, Warsh and Hassett are the three finalists for the Fed chair nomination.US-China trade talks have reportedly made little progress towards a deal, and an impasse was hit on the fentanyl issue, according to WSJ.Eight OPEC+ members agreed to raise the oil production by 137k bpd in October (as touted), citing a steady global economic outlook and current healthy market fundamentals.European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 0.4% after the cash market closed with losses of 0.5% on Friday.Looking ahead, highlights include German Industrial Output (Jul), Trade Balance (Jul), EZ Sentix Index (Sep), US Employment Trends (Aug) & NY Fed SCE.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Tom Slater is a partner and investment manager at Edinburgh-based investment firm Baillie Gifford. Motley Fool Chief Investment Officer Andy Cross talks with Slater about the keys to successful long-term investing. Topics discussed include: Finding long-term winners Managing your mindset Culture and leadership Allocation E-commerce winners Host: Andy CrossProducer: Mac GreerEngineer: Adam LandfairDisclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit ⁠megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

U.S. Valuations: Deutsche Bank research shows that historically, high valuations have led to weaker 10-year returns, raising questions about long-term U.S. equity performanceAI and the Mag-7: The current rally is highly concentrated in mega-cap tech stocks, creating a potential disconnect between pricing and fundamentals.Global Equities & Currencies: State Street reports that the 9% year-to-date decline in the U.S. dollar has boosted international returns, with Europe benefiting mostSector Leadership in Europe: BlackRock highlights resilience in banks, aerospace & defense, luxury, and semiconductors, while remaining cautious on healthcareDiversification: AQR stresses the importance of liquid diversifiers, like trend-following strategies, in reducing risk and improving long-term returnsPortfolio Insights:Dantes Outlook Alpha Capture ETF Model Portfolio gained 2.33% in August, outperforming its benchmark by 30 bps.Key contributors: cyclical sectors, emerging markets, inflation beneficiaries (INFL), and Eurozone/U.S. bond exposure.Year-to-date results: Moderate +6.54%, Aggressive +32.67%, Conservative +9.45%Visit us at www.dantesoutlook.com to learn more.Email damanick@dantesoutlook.com to request a meeting.

Our G10 FX Market Strategist Andrew Watrous challenges the prevailing market view on the U.S. dollar, reaffirming the relevance of Morgan Stanley's "dollar smile" framework. Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Andrew Watrous, G10 FX Strategist at Morgan Stanley. Today – a look at how the US dollar behaves under different global growth circumstances. And why – contrary to the views of some observers – we think the dollar still smiles.It's Friday, September 5, at 10 AM in New York.We've been talking a good amount on this show about the US dollar – not just as a currency, but as the cornerstone of the global financial system. As the world's reserve currency, its movements ripple across markets everywhere. The trajectory of the dollar affects everything from your portfolio's performance to the cost of your next international vacation.Let's start with the “dollar smile,” which is a framework Morgan Stanley FX strategists developed back in 2001, to explain how the dollar behaves under different global growth scenarios.Picture a smile-shaped curve: On the lefthand side, the dollar rises, goes up, when global growth is concerningly weak as nervous investors flock to US assets as a safe haven. On the right side of the smile, when US growth outperforms growth in the rest of the world, capital flows into the US, boosting the dollar. In the middle of the curve – which is the bottom of the smile – the dollar weakens, goes down, when growth is robust around the world and synchronized globally. In that environment - middle of the smile - investors seek riskier assets which weighs on the dollar - in part because they could borrow in dollars and invest outside the US.It's kind of a simple framework, right? But here's the twist: some investors argue that the left side of the smile might be broken. In other words, they say that the dollar no longer rises if people are really worried about global growth.They say that if the US itself is the source of the growth shock -- whether it's political uncertainty or trade wars -- the dollar shouldn't benefit. Or that the rise in US interest rates, which makes it more expensive to borrow in the US and invest abroad, or changes in the structure of global asset holdings, might mean that growth scares won't lead to an inflow to the US and a dollar bid.We disagree with those challenges to the dollar smile framework.To quantify the dollar smile, in order to test whether it still works, we started by using Economic Surprise Indices. These indices measure how actual economic data compares to forecasts.We found that when growth in the US and outside the US are both surprisingly weak - in other words they're much weaker than forecasted - the dollar rises on average about 0.8% per month over the past 20 years. Then on the right side of the dollar smile, when US growth really outperforms expectations, but growth outside the US underperforms expectations, the dollar goes up even more—about 1.1% on average per month. And in the middle of the dollar smile, during synchronized global growth, the dollar tends to decline on average a little bit, about 0.1% on average per month.The question is, does that framework, does that pattern still hold up today?We think it does for a few different reasons. In 2018 and 2019, despite trade tensions and US policy uncertainty playing a big role in driving global growth concerns, the dollar strengthened during periods of poor global growth. In other words, the lefthand side of the dollar smile worked back then, even though the concerns were driven by US factors.And in June 2025, when geopolitical tensions spiked between Israel and Iran, and growth concerns became elevated - the dollar surged. Investors fled to safety, and the dollar delivered.It's true that in April 2025, the dollar dipped initially after the first tariff announcements. But then it fell even more after those tariff hikes were paused, despite a rebound in stocks. Growth concerns were mitigated and the dollar went down. So this episode I think wasn't really a breakdown of the smile. What weighed on the dollar this spring was policy unpredictability in the US, which led investors to reduce their exposure to US assets, rather than concerns about global growth.So these episodes, I think, show that the dollar can still act as a safe haven, despite changing patterns of global asset ownership, the rise in US interest rates, and even when the US itself is the source of global concerns.Now, setting aside the framework, it's important to note that the US dollar dropped about 11% against other currencies in the first half of this year. This was the biggest decline in more than 50 years and it ended a 15-year bull cycle for the US dollar. Moreover, we think that the dollar will continue to weaken through 2026 as the Fed cuts interest rates and policy uncertainty remains elevated.Still, even with all that, we think our framework holds. When markets wobble, remember this: the dollar will probably greet volatility with a smile.Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

Mark Longo and Mike Tosaw from St. Charles Wealth Management break down top trades, hot products, volatility explosions, and more in precious metals, interest rates, and equities on this episode. Timestamps 0:00 - Introduction  5:52 - Movers and Shakers Report (top performers and decliners). 11:58 - Breakdown of the CME Group CVOL report (volatility). 14:52 - Discussion on the precious metals market, with a focus on silver and gold. 24:45 - Analysis of the interest rate market and the 10-year note. 33:57 - Exploration of the equities market, focusing on the S&P 500. 38:53 - Closing remarks and where to find more information.

Mark Longo and Mike Tosaw from St. Charles Wealth Management break down top trades, hot products, volatility explosions, and more in precious metals, interest rates, and equities on this episode. Timestamps 0:00 - Introduction  5:52 - Movers and Shakers Report (top performers and decliners). 11:58 - Breakdown of the CME Group CVOL report (volatility). 14:52 - Discussion on the precious metals market, with a focus on silver and gold. 24:45 - Analysis of the interest rate market and the 10-year note. 33:57 - Exploration of the equities market, focusing on the S&P 500. 38:53 - Closing remarks and where to find more information.

US President Trump said he would be placing chip tariffs “very shortly,” which will be “fairly substantial”, but signalled Apple (AAPL) and others will be safe during his dinner with tech CEOs at the White House on Thursday, according to CNBC.Fed's Williams (voter) reiterated that he expects gradual interest rate cuts over time, while he declined to comment if the market's September rate cut view is correct.US President Trump said they are going to get the war in Ukraine settled; US Defense Department said two Venezuelan military aircraft flew near a US Navy vessel in international waters.APAC stocks mostly took their cues from the gains on Wall Street; European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market finished with gains of 0.4% on Thursday.Looking ahead, highlights include German Industrial Orders (Jul), French Trade Balance, EZ Employment (Final), GDP Revised (Q2), UK Retail Sales (Aug), EZ GDP Revised (Q2), US Jobs Report (Aug), Canadian Jobs Report (Aug).Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

US President Trump said he would be placing chip tariffs “very shortly,” which will be “fairly substantial”, but signalled Apple (AAPL) and others will be safe during his dinner with tech CEOs at the White House on Thursday, according to CNBC.US President Trump said they are going to get the war in Ukraine settled; US Defense Department said two Venezuelan military aircraft flew near a US Navy vessel in international waters.European bourses are mostly firmer but with trade tentative ahead of NFP; Broadcom +7% after strong results.USTs are incrementally firmer whilst USD dips awaiting US NFP; Gilts lead after Retail Sales.Crude was pressured but now flat pre-OPEC, Gold holds around USD 3,550/oz into the US jobs report.Looking ahead, US Jobs Report (Aug), Canadian Jobs Report (Aug).Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Our Head of Corporate Credit Research Andrew Sheets discusses the scenarios markets may face in September and for the rest of the year, as the Federal Reserve weighs interest rate cuts amidst slowing job growth and persistent inflation. Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Andrew Sheets, head of Corporate Credit Research at Morgan Stanley.Today, the narrow economic path the markets face as we come back from summer.It's Thursday, September 4th at 2:00 PM in London.September is a month of change and one of my favorite times of the year. The weather gets just a little crisper. Kids go back to school. Football, both kinds, are back on tv. And financial markets return from the summer in earnest, quickly ramping back up to full speed. This year, September brings a number of robust debates that we'll be covering on this podcast, but chief among these might be exactly how strong or not investors actually want the economy to be.You see, at the moment, the Federal Reserve is set to lower interest rates, and they're set to do that even though inflation in the US is still well above target and it's moving higher. That's unusual and it's made even more unusual in the context of financial conditions being very easy and the US government borrowing a historically large amount of money.The Fed's reason to lower interest rates despite strong markets, elevated inflation and high budget deficits, is the concern that the US labor market is weakening. And this fear is not unfounded. US job growth has recently slowed sharply. In 2023 and 2024, the US was adding on average about 200,000 jobs every month. But this year job growth has been less than half that amount, just 85,000 per month. And the most recent data's even worse. Tomorrow brings another important update. But here's the rub: the Fed, in theory, is lowering rates because the labor market is weaker. Markets would like those lower rates, but investors would not like a significantly weaker economy.And this logic is born out pretty starkly in history. When the Fed is lowering interest rates as growth holds up, that represents some of the best ever market environments, including the mid 1990s. But when the Fed lowers rates as the economy weakens, well, that represents some of the worst. So as the leaves start to turn and the air gets a little chilly, this is the fine line that markets face coming back into September. Weaker data for the labor market would make it easier to justify Fed cuts, but would make the broader backdrop more historically challenging. Stronger data could make the Fed look offsides, committing to lower interest rates despite high and rising inflation, easy financial conditions, and what would be a still resilient economy. And that could unleash even more aggressiveness and animal spirits.Stock markets might like that aggressiveness, but neither outcome is great for credit. And so by process of elimination, our market is hoping for something moderate, belt high, and over the middle of the plate. Our economists forecast for this Friday's jobs report for about 70,000 jobs, and a stable unemployment rate would fit that moderate bill. But for this month and now for the rest of the year, we'll be walking a narrow economic path.Thank you as always for your time. If you find Thoughts of the Market useful, let us know by leaving a review wherever you listen, and also tell a friend or colleague about us today.

APAC stocks followed suit to the mixed performance stateside, where tech and communications outperformed following the Google antitrust ruling, and participants digested dovish data and Fed rhetoric.US President Trump said it is possible that someday tariffs will replace income tax.UK Chancellor Reeves dismissed forecasts of a GBP 50bln "black hole" in the public finances, despite higher borrowing costs and expected tax rises piling pressure on the chancellor ahead of the autumn Budget, according to the BBC.US President Trump said he will find out over the next week or so how good the relationship is with Russia, while he also commented that the US will help Poland protect itself with US soldiers to remain in Poland and will put more there if they wantEuropean equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.1% after the cash market finished with gains of 0.6% on Wednesday.Looking ahead, highlights include Swedish CPIF (Aug), Swiss CPI (Aug), EZ Retail Sales, US ISM Services PMI (Aug), ADP National Employment (Aug), Challenger Layoffs (Aug), Jobless Claims, Atlanta Fed GDP, Canadian Trade Balance (Jul), BoE DMP, Senate Banking Committee to hold hearing for US President Trump's Fed nominee Stephen Miran, Federal Housing Press Conference "In the Matter of Lisa D. Cook", Speakers including ECB's Cipollone, Fed's Williams & RBA's Hauser, Supply from Spain, France, UK & US.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

European bourses and US equity futures are modestly firmer ahead of US data.USD awaits a data deluge, Antipodeans lag and JPY digests potential US/Japan auto tariff reduction.EGBs and Gilts bounce while USTs remain flat into data; Spanish auction was well received, whilst some short-lived pressure was seen on the French outing.Oil pulls back as traders brace ahead of this weekend's OPEC meeting; some upside in the complex seen after Russian Deputy PM Novak said OPEC-8 are not discussing production increase now.Looking ahead, US ISM Services PMI (Aug), ADP National Employment (Aug), Challenger Layoffs (Aug), Jobless Claims, Atlanta Fed GDP, Canadian Trade Balance (Jul), BoE DMP, Senate Banking Committee to hold hearing for US President Trump's Fed nominee Stephen Miran, Speakers including Fed's Williams & RBA's Hauser.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Fed Chair Jay Powell's speech at Jackson Hole underscored the central bank's new focus on managing downside growth risks. Michael Zezas, our Global Head of Fixed Income Research and Public Policy Strategy, talks about how that shift could impact markets heading into 2026. Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy.Today: What a subtle shift in the Fed's reaction function could mean for markets into year-end.It's Wednesday, September 3rd at 11am in New York.Last week, our U.S. economics team flagged a subtle but important shift in U.S. monetary policy. Chair Jay Powell's speech at Jackson Hole underscored that the Fed looks more focused on managing downside growth risks and, consequently, a bit more tolerant on inflation.As you heard Michael Gapen and Matthew Hornbach discuss last week – our colleagues expect this brings forward another Fed cut into September, kicking off a quarterly pace of 25 basis-point moves. But while this is a meaningful change in the timing of Fed rate cuts, this path would only result in slightly lower policy rates than those implied by the futures market, a proxy for the consensus of investors.So what does it mean for our views across asset classes? In short, our central case is for mostly positive returns across fixed income and equities into year-end. But the Fed's increased tolerance for inflation is a new wrinkle that means investors are likely to experience more volatility along the way.Consider U.S. government bonds. A slower economy and falling policy rates argue for lower Treasury yields. But if investors grow more convinced that the Fed will tolerate firmer inflation, the curve could steepen further, with the risk of longer maturity yields falling less, or potentially even rising.Or consider corporate bonds. Our economic growth view is “slower but still expanding,” which generally bodes well for corporate balance sheets and, thus, the pricing of credit risk. That combined with lower front-end rates suggests a solid total return outlook for corporate credit, keeping us constructive on the asset class. But of course, if long end yields are moving higher, it would certainly cut against overall returns potential.Finally, consider the stock market. The base case is still constructive into year-end as U.S. earnings hold firm, and recent tax cuts should further help corporate cash flows. However, if long bonds sell off, this could put the rally at risk – at least temporarily, as my colleague Mike Wilson has highlighted; given that higher long-end yields are a challenge to the valuation of growth stocks.The risk? A repeat of the early-April dynamic where a long-end sell-off pressures valuations.Could we count on a shift in monetary policy to curb these risks? Or another public policy shift such as easing tariffs or Treasury adjusting its bond issuance plans? Possibly. But investors should understand this would be a reaction to market conditions, not a proactive or preventative shift. So bottom line, we still see many core markets set up to perform well, but the sailing should be less smooth than it has been in recent months.Thanks for listening. If you enjoy Thoughts on the Market, please leave us a review and tell your friends about the podcast. We want everyone to listen.

A sell-off in government bonds spilled into the equity market as stocks fell on Tuesday, and Eurozone inflation ticked up to 2.1 per cent in August. Plus, European banks are intensifying their calls for regulators to remove obstacles to cross-border banking services in the EU. Mentioned in this podcast:European banks push for lower cross-border hurdlesUS stocks fall as bond sell-off spills into equitiesEurozone inflation rises to 2.1% in AugustPound falls as UK long-term borrowing costs hit highest level since 1998Sign up for the FT Weekend Festival at ft.com/festival and use the promo code “FTPodcasts” for 10 per cent off.Today's FT News Briefing was produced by Fiona Symon, Victoria Craig Katya Kumkova and Marc Filippino. Additional help from Kelly Garry, and David da Silva. The FT's acting co-head of audio is Topher Forhecz. The show's theme music is by Metaphor Music. Hosted on Acast. See acast.com/privacy for more information.

Rob Isbitts from Sungarden Investors Club talks again to analysts Julia Ostian, Jack Bowman, and Kenio Fontes (1:00). Buying the dips, market positioning (9:25). Treasury rates and watching institutional investors' allocations (11:30). Looking differently at Microsoft and Amazon, preparing for a bear market (17:50). Software, hardware, and AI stock selection (22:10). Yield curve steepening (28:00).Show Notes:High Conviction Ideas With Next Gen InvestorsEpisode transcriptsFor full access to analyst ratings, stock quant scores and dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions

Robert Conzo explains yesterday's bond market reaction to a U.S. appeals judge ruling most of Trump's tariffs illegal, and contrasts it to equity market moves. He also looks at the Fed's dual mandate, with labor markets more of a concern – and questioning around the accuracy of those numbers. He argues inflation is under control and not as much of an issue on the minds of investors or corporations. Robert thinks the market might be in a holding pattern but is still bullish on the AI trade.======== Schwab Network ========Empowering every investor and trader, every market day. Subscribe to the Market Minute newsletter - https://schwabnetwork.com/subscribeDownload the iOS app - https://apps.apple.com/us/app/schwab-network/id1460719185Download the Amazon Fire Tv App - https://www.amazon.com/TD-Ameritrade-Network/dp/B07KRD76C7Watch on Sling - https://watch.sling.com/1/asset/191928615bd8d47686f94682aefaa007/watchWatch on Vizio - https://www.vizio.com/en/watchfreeplus-exploreWatch on DistroTV - https://www.distro.tv/live/schwab-network/Follow us on X – https://twitter.com/schwabnetworkFollow us on Facebook – https://www.facebook.com/schwabnetworkFollow us on LinkedIn - https://www.linkedin.com/company/schwab-network/ About Schwab Network - https://schwabnetwork.com/about

APAC stocks were predominantly lower following the weak handover from Wall St; sentiment dampened by global debt concerns.European equity futures indicate a higher cash market open with Euro Stoxx 50 future up 0.3% after the cash market closed with losses of 1.4% on Tuesday.DXY is holding onto yesterday's gains, JPY and GBP remain softer vs. the USD after a bruising session on Tuesday.USTs lack direction following yesterday's bear-steepening. Bunds are a touch softer, JGB tracked recent losses in global peers.Crude futures lacked conviction after whipsawing yesterday, spot gold is steady after printing another fresh ATH.UK Chancellor Reeves has pencilled in November 26th for the date of the Budget, according to Huffington Post.Looking ahead, highlights include EU Producer Prices, EZ, UK, US Services PMI (Final), US Durable Goods R (Jul), JOLTS Job Openings (Jul), NBP Announcement, Fed Beige Book, BoE's Mann, Breeden, Bailey, Lombardelli, Greene & Taylor, ECB's Lagarde, RBA Governor Bullock, Fed's Musalem & Kashkari, Supply from Germany.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk

Our Co-Heads of Securitized Products Research Jay Bacow and James Egan explain why the macro backdrop could be changing in favor of agency mortgages after the Fed's annual meeting in Jackson Hole. Read more insights from Morgan Stanley.----- Transcript -----Jay Bacow: Welcome to Thoughts on the Market. I'm Jay Bacow, Co-Head of Securitized Products Research at Morgan Stanley. James Egan: And I'm Jim Egan, the other Co-Head of Securitized Products Research at Morgan Stanley. Jay Bacow: Today we're here to talk about why mortgages offer value after Jackson Hole. It's Tuesday, September 2nd at 2pm in New York. James Egan: So, Jay, let's start with the big picture after Jackson Hole, the Fed seems like it's leaning towards cutting rates in a steady, almost programmatic fashion. And in prior episodes of Thoughts on the Market, you've heard different strategists at Morgan Stanley talk about the potential implications there.But for mortgages, what does this mean? Jay Bacow: Well, it takes a lot of the uncertainty out of the market, and that's a big deal. One of the worst-case scenario[s] for agency mortgages – that the investors are buying not mortgages that homeowners have – would've been the Fed staying on hold for much longer than expected. With that risk receding, the backdrop for investors owning agency mortgages feels a lot more supportive. And when we look at high quality assets, we think mortgages look like the cheapest option. Jim, you mentioned some of the previous strategists that come on Thoughts on the Market. Our Global Head of Corporate Credit Strategy, Andrew Sheets had highlighted recently how credit spreads are trading at basically the tights of the past 20 years. Mortgages are basically at the average level of the past 20 years. It seems attractive to us. James Egan: And that relative value really does matter. Investors are looking for places to earn yield without taking on too much credit risk. Mortgages, particularly agency mortgages with government guarantee there, they offer that balance. Jay Bacow: Right. And it's not just that balance, but when we think about what goes into the asset pricing, the supply and demand picture makes a big difference. And that we think is changing. One of the reasons that mortgages have underperformed corporate credit is that when you look at the composition of the buyers, the two largest holders of mortgages are the Fed and domestic banks. The Fed's obviously going to continue to run their portfolio down, but domestic banks have also been on the sidelines. And that's meant that money managers, and to a lesser extent overseas, have had to be the largest buyers. But we think that could change. James Egan: Right, with more clarity on Fed policy, banks in particular may get more comfortable adding mortgages to their balance sheets, though the exact timing depends on regulatory developments. REITs might also find this more compelling? Jay Bacow: Right. If the Fed's cutting rates, the front end is going to be lower, and that's going to mean that the incentive to move out of cash should be higher, and that's going to help both banks and likely REITs. But then there's also the supply side.Net issuance of conventional mortgage has been negative this year. That's obviously good. And some of the other technicals are improving as well. Vols are trading better, and all of this just contributes to a healthier landscape. James Egan: Right. And another thing that we've talked about when discussing mortgage valuations is the importance of volatility. If you're buying mortgages, you're inherently short rate volatility – and volatility has come down meaningfully since last year, even if it's still above pre-COVID norms. Lower volatility supported for mortgage valuations, especially when paired with a Fed that's cutting rates steadily. Though Jay, some of that already in the price? Jay Bacow: Yeah, look. We didn't say mortgages were cheap. We just said mortgages are trading at the long-term averages. But in an environment where stocks are near the all time high and credits near the tights of the past 20 years, we do see that value. And the Fed cutting rates, as we said, should incentivize investors to move out of cash and into securities. Now, there are risks when valuations and other asset classes are as tight or as high as they are. You could see risk assets broadly underperform and mortgages are a risk asset. So, if credit widens, mortgages would not be immune. James Egan: And timing is important here too, right? Especially we think about banks coming back if they wait for full clarity on Basel III proposals – that could be delayed. On top of that, there's prepayment risk… Jay Bacow: Yeah, if rates rally, then speeds could pick up and investors are going to demand more compensation. But summing it up. Mortgages look wide to alternative asset classes. The demand picture we think is going to improve, and more clarity around the Fed's path is going to be supportive as well. All of that we think makes us feel confident this is an environment that mortgages should do well. It's not about a snap tighter and spread, it's more about getting paid carry in an environment where spreads can grind in over time. But Jim, we like mortgages. It's been a pleasure talking to you. James Egan: Pleasure talking to you too, Jay, and to all of you regularly hearing us out. Thank you for listening to another episode of Thoughts on the Market. Please leave a review or a like wherever you get this podcast and share Thoughts on the Market with a friend or colleague today. Jay Bacow: Go smash that subscribe button.

In the second of a two-part episode, our Chief U.S. Economist Michael Gapen and Global Head of Macro Strategy Matthew Hornbach talk about how Treasury yields and the U.S. dollar could react to the possible Fed rate path.Read more insights from Morgan Stanley.----- Transcript -----Matthew Hornbach: Welcome to Thoughts on the Market. I'm Matthew Hornbach, Global Head of Macro Strategy. Michael Gapen: And I'm Michael Gapen Morgan Stanley's Chief U.S. Economist. Yesterday we talked about Michael's reaction to the Jackson Hole meeting last week, and our assessment of the Fed's potential policy pivot. Today my reaction to the price action that followed Chair Powell's speech and what it means for our outlook for the interest rate markets and the U.S. dollar. It's Friday, August 29th at 10am in New York, Michael Gapen: Okay, Matt. Yesterday you were in the driver's seat asking me questions about how Chair Powell's comments at Jackson Hole influenced our views around the outlook for monetary policy. I'd like to turn it back to you, if I may. What did you make of the price action that followed the meeting? Matthew Hornbach: Well, I think it's safe to say that a lot of investors were surprised just as you were by what Chair Powell delivered in his opening remarks. We saw a fairly dramatic decline in short-term interest rates, taking the two-year Treasury yield down quite a bit. And at the same time, we also saw the yield curve steepen, which means that the two-year yield fell much more than the 10-year yield and the 30-year bond yield fell. And I think what investors were thinking with this surprise in mind is just what you mentioned earlier – that perhaps this is a Fed that does have slightly more tolerance for above target inflation. And so, you can imagine a world in which, if the Fed does in fact cut rates, as you're forecasting, or more aggressively than you're forecasting, amidst an environment where inflation continues to run above target. Then you could see that investors would gravitate towards shorter maturity treasuries because the Fed is cutting interest rates and typically shorter-term Treasury yields follow the Fed funds rate up or down. But at the same time reconsider their love of duration and taking duration risk. Because when you move out the yield curve in your investments and you're buying a 10-year bond or a 30-year bond, you are inherently taking the view that the Fed does care about inflation and keeping it low and moving it back to target. And if this Fed still cares about that, but perhaps on the margin slightly less than it did before, then perhaps investors might demand more compensation for owning that duration risk in the long end of the yield curve. Which would then make it more difficult for those long-term yields to fall. And so, I think what we saw on Friday was a pretty classic response to a Federal Reserve speech in this case from the Chair that was much more dovish than investors had anticipated going in. The final thing I'd say in this regard is the following Monday, when we looked at the market price action, there wasn't very much follow through. In other words, the Treasury market didn't continue to rally, yields didn't continue to fall. And I think what that is telling you is that investors are still relatively optimistic about the economy at this point. Investors aren't worried that the Fed knows something that they don't. And so, as a result, we didn't really see much follow through in the U.S. Treasury market on the following Monday. So, I do think that investors are going to be watching the data much like yourself, and the Fed. And if we do end up getting worse data, the Treasury market will likely continue to perform very well. If the data rebounds, as you suggested in one of your alternative scenarios, then perhaps the Treasury rally that we've seen year-to-date will take a pause. Michael Gapen: And if I can follow up and ask you about your views on the trough of any cutting cycle. We have generally been projecting an end to the easing cycle that's below where markets are pricing. So, in general, a deeper cutting cycle. Could some of that – the market viewpoint of greater tolerance for inflation be driving market prices vis-a-vis what we're thinking? Or how do you assess where the market prices, the trough of any cutting cycle, versus what we're thinking at any point in time? Matthew Hornbach: So, once you move beyond the forecastable horizon, which you tell me… Michael Gapen: About three days … Matthew Hornbach: Probably about three days. But, you know, within the next couple of months, let's say. The way that the market would price a central bank's likely policy path, or average policy path, is going to depend on how investors are thinking about the reaction function of the central bank. And so, to the extent that it becomes clear that the central bank, the Fed, is increasingly tolerant of above target inflation in order to ensure that the balance of risks don't become unbalanced, let's say. Then I think you would expect to see that show up in a lower market price for the policy rate at which the Fed eventually stops the easing cycle, which would presumably be lower than what investors might have been thinking earlier. As we kind of make our way from here, closer to that trough policy rate, of course, the data will be in the driver's seat. So, if we saw a scenario in which the economic activity data rebounded, then I would say that the way that the market is pricing the trough policy rate should also rebound. Alternatively, if we are trending towards a much weaker labor market, then of course the market would continue to price lower and lower trough policy rates. Michael Gapen: So, Matt, with our new baseline path for Fed policy with quarterly rate cuts starting in September through the end of 2026, how has your view changed on the likely direction and path for Treasury yields and the U.S. dollar? Matthew Hornbach: So, when we put together our quarterly projections for Treasury yields, of course we link them very closely with your forecast for Fed policy, activity in the U.S. economy, as well as inflation. So, we will likely have to modify slightly the exact way in which we get down to a 4 percent 10-year yield by the end of this year, which is our current forecast, and very likely to remain our forecast going forward. I don't see a need at this point to adjust our year-end forecast for 10-year Treasury yields. When we move into 2026, again here we would also likely make some tweaks to our quarterly path for 10-year Treasury yields. But at this point, I'm not inclined to change the year end target for 2026. Of course, the end of 2026 is a lifetime away it seems from the current moment, given that we're going to have so much to do and deal with in 2026. For example, we're going to have a midterm election towards the end of the year, we will have a new chair of the Federal Reserve, and there's going to be a lot for us to deal with. So, in thinking about where are 10-year yield is going to end 2026, it's not just about the path of the Fed funds rate between now and then. It's also the events that occur, that are much more difficult to forecast than let's say the 10-year Treasury yield itself is – which is also very difficult to forecast. But it's also about by the time we get to the end of 2026, what are investors going to be thinking about 2027? You know, that is really the trick to forecasting. So, at this point, we're not inclined to change the levels to which we think Treasury yields will get to. But we are inclined to tweak the exact quarterly path. Michael Gapen: And the U.S. dollar? Matthew Hornbach: , We have been U.S. Dollar bears since the beginning of the year, and the U.S. dollar has in fact lost about 10 percent of its value relative to its broad set of trading partners. We do think that the dollar will continue to lose value over the course of the next 12 to 18 months. The exact quarterly path, we may have to tweak somewhat because also the dollar is not just about the Fed path. It's also about the path for the ECB, and the path for the Bank of England, and the path for the Bank of Japan, etcetera. But in terms of the big picture? The big picture is that the dollar should de continue to depreciate in our view. And that's what we'll be telling our investors.So, Mike, thanks for taking the time to talk. Michael Gapen: Great speaking with you, Matt. Matthew Hornbach: And thanks for listening. We look forward to bringing you another episode around the time of the September FOMC meeting where we will update our views once again. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.

In the first of a two- part episode, our Chief U.S. Economist Michael Gapen and Global Head of Macro Strategy Matthew Hornbach discuss the outcome of the Jackson Hole meeting and the outlook for the U.S. economy and the Fed rate path during the rest of the year. Read more insights from Morgan Stanley.----- Transcript -----Matthew Hornbach: Welcome to Thoughts on the Market. I'm Matthew Hornbach, Global Head of Macro Strategy.Michael Gapen: And I'm Michael Gapen, Morgan Stanley's Chief U.S. Economist.Matthew Hornbach: Last Friday, the Jackson Hole meeting delivered a big surprise to markets. Both stocks and bonds reacted decisively.Today, the first of a two-part episode. We'll discuss Michael's reaction to Chair Powell's Jackson Hole comments and what they mean for his view on the outlook for monetary policy. Tomorrow, the outlook for interest rate markets and the US dollar. It's Thursday, August 28th at 10am in New York. So, Mike, here we are after Jackson Hole. The mood this year felt a lot more hawkish, or at least patient than what we saw last week. And Chair Powell really caught my attention when he said, “with policy and restrictive territory, the baseline outlook for the shifting balance of risks may warrant adjusting our policy stance.” That line has been on my mind ever since. So, let's dig into it. What's your gut reaction?Michael Gapen: Yeah, Matt, it was a surprise to me, and I think I would highlight three aspects of his Jackson Hole comments that were important to me. So, I think what happened here, of course, is the Fed became much more worried about downside risk to the labor market after the July employment report, right? So, at the July FOMC meeting, which came before that report, Powell had said, ‘Well, you know, slow payroll growth is fine as long as the unemployment rate stays low.' And that's very much in line with our view. But sometimes these things are easier said than done. And I think the July employment report told them perhaps there's more weakness in the labor market now than they thought.So, I think the messaging here is about a shift towards risk management mode. Maybe we need to put in a couple policy rate cuts to shore up the labor market. And I think that was the big change and I think that's what drove the overall message in the statement. But there were two other parts of it that I think were interesting, you know. From the economist's point of view, when the chair explicitly writes in a speech that ‘the economy now may warrant adjustments in our policy stance,' right? I mean, that's a big deal. It suggests that the decision has been largely made, and I think anytime the Fed is taking a change of direction, either easing or tightening, they're not just going to do one move. So, they're signaling that they're likely prepared to do a series of moves, and we can debate about what that means. And the third thing that struck me is right before the line that you mentioned he did qualify the need to adjust rates by saying, well, whatever we do, we should, “Proceed cautiously.” So, a year ago, as you recall, the Fed opened up with a big 50 basis point rate cut, which was a surprise. And cut at three successive meetings. So, a hundred basis points of cuts over three meetings, starting with a 50 basis point cut. I think the phraseology ‘proceeds carefully' is a signal to markets that, ‘Hey, don't expect that this time around.' The world's different. This is a risk management discussion. And so, we think, two rate cuts before year end would be most likely. Maybe you get three. But I don't think we should expect a large 50 basis point cut at the September meeting. So those would be my thoughts. Downside risk to the labor market – putting this into words says something important to me. And the ‘proceed cautiously' language I think is something markets also need to take into account.Matthew Hornbach: So how do you translate that into a forecasted path for the Fed? I mean, in terms of your baseline outlook, how many rate cuts are you forecasting this year? And what about in 2026?Michael Gapen: Right. So, we previously; we thought what the Fed was doing was leaning against risks that inflation would be persistent. They moved into that camp because of how fast tariffs were going up and the overall level of the effective tariff rate. So, we thought they would stay on hold for longer and when they move, move more rapidly. What they're saying now in a risk management sense, right; they still think risk to inflation is to the upside, but the unemployment rate is also to the upside. And they're looking at both of those as about equally weighted. So, in a baseline outlook where the Fed's not assuming a recession and neither are we, you get a maybe a dip in growth and a rise in inflation. But growth recovers and inflation comes down next year. In that world, and with the idea that you're proceeding cautiously, they're kind of moving and evaluating, moving and evaluating.So, I think the translation here is: a path of quarterly rate cuts between now and the end of 2026. So, six rate cuts, but moving quarterly, like September and December this year; March, June, September, and December next year; which would take us to a terminal target range of 2.75 to 3. So rather than moving later and more rapidly, you move earlier, but more gradually. That's how we're thinking about it now.Matthew Hornbach: And that's about a 25 basis point upward adjustment to the trough policy rate that you were forecasting previously…Michael Gapen: That's right. So, the prior thought was a Fed that moves later may have to cut more, right? Because you're – by holding policy tighter for longer – you're putting more downward weight on the economy from a cyclical perspective. So, you may end up cutting more to essentially reverse that in 2026. So, by moving earlier, maybe a Fed that moves a little earlier, cuts a little less.Matthew Hornbach: In terms of the alternative outcomes. Obviously, in any given forecast, things can go not as expected. And so, if the path turns out to be something other than what you're forecasting today, what would be some of the more likely outcomes in your mind?Michael Gapen: Yeah, as we like to say in economics, we forecast so we know where we're wrong. So, you're right, the world can evolve very differently. So just a couple thoughts. You know, one, now that we're thinking the Fed does cut in September, what gets them not to cut? You'd need a – I think, a really strong August employment report; something around 225,000 jobs, which would bring the three-month moving average back to around 150, right. That would be a signal that the May-June downdraft was just a post Liberation Day pothole and not trend deterioration in the labor market. So that, you know, would be one potential alternative. Another is – although we've projected quarterly paths in this kind of nice gradual pace of cuts, we could get a repeat of last year where the Fed cuts 50 to 75 basis points by year end but realizes the labor market has not rolled over. And then we get some tariff pass through into inflation. And maybe residual seasonality and inflation in Q1. And then the Fed goes on hold again, then cuts could resume later in the year. And I also think in the backdrop here, when the Fed is saying we are easing in a risk management sense and we're easing maybe earlier than we otherwise would – that suggests the Fed has greater tolerance for inflation. So, understanding how much tolerance this Fed or the next one has for above target inflation, I think could influence how many rate cuts you eventually get in in 2026. So, we could even see a deeper trough through greater inflation tolerance. And finally, of course, we're not out of the woods with respect to recession risk. We could be wrong. Maybe the labor market is trend weakening and we're about to find that out. Growth is slowing. Growth was about 1.3 percent in the first half of the year. Final sales is softer. Of course, in a recession alternative scenario, the Fed's probably cutting much deeper, maybe down to 1 50 to 175 on the funds rate.So, I mean, Matt, you make a good point. There's still many different ways the economy can evolve and many different ways that the Fed's path for policy rates can evolve.Matthew Hornbach: Well, that's a good place to bring this Part 1 episode to an end. Tune in tomorrow, for my reaction to the market price action that followed Chair Powell's speech -- and what it means for our outlook for interest rate markets and the U.S. dollar.Mike, thanks for taking the time to talk.Michael Gapen: Great speaking with you, Matt. Matthew Hornbach: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.

Our Head of Corporate Credit Research Andrew Sheets discusses why a potential start of monetary easing by the Federal Reserve might be a cause for concern for credit markets. Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Head of Corporate Credit Research at Morgan Stanley. Today – could interest rate cuts by the Fed unleash more corporate aggressiveness? It's Wednesday, August 27th at 2pm in London. Last week, the Fed chair, Jerome Powell hinted strongly that the Central Bank was set to cut interest rates at next month's meeting. While this outcome was the market's expectation, it was by no means a given.The Fed is tasked with keeping unemployment and inflation low. The US unemployment rate is low, but inflation is not only above the Fed's target, it's recently been trending in the wrong direction. And to bring inflation down the Fed would typically raise interest rates, not lower them. But that is not what the Fed appears likely to do; based importantly on a belief that these inflationary pressures are more temporary, while the job market may soon weaken. It is a tricky, unusual position for the Fed to be in, made even more unusual by what is going on around them. You see, the Fed tries to keep the economy in balance; neither too hot or too cold. And in this regard, its interest rate acts a bit like taps on a faucet. But there are other things besides this rate that also affect the temperature of the economic water. How easy is it to borrow money? Is the currency stronger or weaker? Are energy prices high or low? Is the equity market rising or falling? Collectively these measures are often referred to as financial conditions. And so, while it is unusual for the Federal Reserve to be lowering interest rates while inflation is above its target and moving higher, it's probably even more unusual for them to do so while these other governors of economic activity, these financial conditions are so accommodative. Equity valuations are high. Credit spreads are tight. Energy prices are low. The US dollar is weak. Bond yields have been going down, and the US government is running a large deficit. These are all dynamics that tend to heat the economy up. They are more hot water in our proverbial sink. Lowering interest rates could now raise that temperature further. For credit, this is mildly concerning, for two rather specific reasons. Credit is currently sitting with an outstanding year. And part of this good year has been because companies have generally been quite conservative, with merger activity modest and companies borrowing less than the governments against which they are commonly measured. All this moderation is a great thing for credit. But the backdrop I just described would appear to offer less moderation. If the Fed is going to add more accommodation into an already easy set of financial conditions, how long will companies really be able to resist the temptation to let the good times roll? Recently merger activity has started to pick up. And historically, this higher level of corporate aggressiveness can be good for shareholders. But it's often more challenging to lenders. But it's also possible that the Fed's caution is correct. That the US job market really is set to weaken further despite all of these other supportive tailwinds. And if this is the case, well, that also looks like less moderation. When the Fed has been cutting interest rates as the labor market weakens, these have often been some of the most challenging periods for credit, given the risk to the overall economy. So much now rests on the data what the Fed does and how even new Fed leadership next year could tip the balance. But after significant outperformance and with signs pointing to less moderation ahead, credit may now be set to lag its fixed income peers. Thank you as always for listening. If you find Thoughts to the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today.

Our analysts Adam Jonas and Alex Straton discuss how tech-savvy young professionals are influencing retail, brand loyalty, mobility trends, and the broader technology landscape through their evolving consumer choices. Read more insights from Morgan Stanley.----- Transcript -----Adam Jonas: Welcome to Thoughts on the Market. I'm Adam Jonas, Morgan Stanley's Embodied AI and Humanoid Robotics Analyst. Alex Straton: And I'm Alex Straton, Morgan Stanley's U.S. Softlines Retail and Brands Analyst. Adam Jonas: Today we're unpacking our annual summer intern survey, a snapshot of how emerging professionals view fashion retail, brands, and mobility – amid all the AI advances.It is Tuesday, August 26th at 9am in New York.They may not manage billions of dollars yet, but Morgan Stanley's summer interns certainly shape sentiment on the street, including Wall Street. From sock heights to sneaker trends, Gen Z has thoughts. So, for the seventh year, we ran a survey of our summer interns in the U.S. and Europe. The survey involved more than 500 interns based in the U.S., and about 150 based in Europe. So, Alex, let's start with what these interns think about fashion and athletic footwear. What was your biggest takeaway from the intern survey? Alex Straton: So, across the three categories we track in the survey – that's apparel, athletic footwear, and handbags – there was one clear theme, and that's market fragmentation. So, for each category specifically, we observed share of the top three to five brands falling over time. And what that means is these once dominant brands, as consumer mind share is falling – and it likely makes them lower growth margin and multiple businesses over time. At the same time, you have smaller brands being able to captivate consumer attention more effectively, and they have staying power in a way that they haven't necessarily historically. I think one other piece I would just add; the rise of e-commerce and social media against a low barrier to entry space like apparel and footwear means it's easier to build a brand than it has been in the past. And the intern survey shows us this likely continues as this generation is increasingly inclined to shop online. Their social media usage is heavy, and they heavily rely on AI to inform, you know, their purchases.So, the big takeaway for me here isn't that the big are getting bigger in my space. It's actually that the big are probably getting smaller as new players have easier avenues to exist. Adam Jonas: Net apparel spending intentions rose versus the last survey, despite some concern around deteriorating demand for this category into the back half. What do you make of that result? Alex Straton: I think there were a bit conflicting takes from the survey when I look at all the answers together. So yes, apparel spending intentions are higher year-over-year, but at the same time, clothing and footwear also ranked as the second most category that interns would pull back on should prices go up. So let me break this down. On the higher spending intentions, I think timing played a huge role and a huge factor in the results. So, we ran this in July when spending in our space clearly accelerated. That to me was a function of better weather, pent up demand from earlier in the quarter, a potential tariff pull forward as headlines were intensifying, and then also typical back to school spending. So, in short, I think intention data is always very heavily tethered to the moment that it's collected and think that these factors mean, you know, it would've been better no matter what we've seen it in our space. I think on the second piece, which is interns pulling back spend should prices go up. That to me speaks to the high elasticity in this category, some of the highest in all of consumer discretionary. And that's one of the few drivers informing our cautious demand view on this space as we head into the back half. So, in summary on that piece, we think prices going higher will become more apparent this month onwards, which in tandem with high inventory and a competitive setup means sales could falter in the group. So, we still maintain this cautious demand view as we head into the back half, though our interns were pretty rosy in the survey. Adam Jonas: Interesting. So, interns continue to invest in tech ecosystems with more than 90 percent owning multiple devices. What does this interconnectedness mean for companies in your space? Alex Straton: This somewhat connects to the fragmentation theme I mentioned where I think digital shopping has somewhat functioned as a great equalizer in the space and big picture. I interpret device reliance as a leading indicator that this market diversification likely continues as brands fight to capture mobile mind share. The second read I'd have on this development is that it means brands must evolve to have an omnichannel presence. So that's both in store and online, and preferably one that's experiential focus such that this generation can create content around it. That's really the holy grail. And then maybe lastly, the third takeaway on this is that it's going to come at a cost. You, you can't keep eyeballs without spend. And historical brick and mortar retailers spend maybe 5 to 10 percent of sales on marketing, with digital requiring more than physical. So now I think what's interesting is that brands in my space with momentum seem to have to spend more than 10 percent of sales on marketing just to maintain popularity. So that's a cost pressure. We're not sure where these businesses will necessarily recoup if all of them end up getting the joke and continuing to invest just to drive mind share. Adam, turning to a topic that's been very hot this year in your area of expertise. That's humanoid robots. Interns were optimistic here with more than 60 percent believing they'll have many viable use cases and about the same number thinking they'll replace many human jobs. Yet fewer expect wide scale adoption within five years. What do you think explains this cautious enthusiasm? Adam Jonas: Well actually Alex, I think it's pretty smart. There is room to be optimistic. But there's definitely room to be cautious in terms of the scale of adoption, particularly over five years. And we're talking about humanoid robots. We're talking about a new species that's being created, right? This is bigger than just – will it replace our job? I mean, I don't think it's an exaggeration to ask what does this do to the concept of being human? You know, how does this affect our children and future generations? This is major generational planetary technology that I think is very much comparable to electricity, the internet. Some people say the wheel, fire, I don't know. We're going to see it happen and start to propagate over the next few years, where even if we don't have widespread adoption in terms of dealing with it on average hour of a day or an average day throughout the planet, you're going to see the technology go from zero to one as these machines learn by watching human behavior. Going from teleoperated instruction to then fully autonomous instruction, as the simulation stack and the compute gets more and more advanced. We're now seeing some industry leaders say that robots are able to learn by watching videos. And so, this is all happening right now, and it's happening at the pace of geopolitical rivalry, Sino-U.S. rivalry and terra cap, you know, big, big corporate competitive rivalry as well, for capital in the human brain. So, we are entering an unprecedented – maybe precedented in the last century – perhaps unprecedented era of technological and scientific discovery that I think you got to go back to the European and American Enlightenment or the Italian Renaissance to have any real comparisons to what we're about to see. Alex Straton: So, keeping with this same theme, interns showed strong interest in household robots with 61 percent expressing some interest and 24 percent saying they're very or extremely interested. I'm going to take you back to your prior coverage here, Adam. Could this translate into demand for AI driven mobility or smart infrastructure? Adam Jonas: Well, Alex, you were part of my prior coverage once upon a time. We were blessed with having you on our team for a year, and then you left me… Alex Straton: My golden era. Adam Jonas: But you came back, you came back. And you've done pretty well. So, so look, imagine it's 1903, the Wright Brothers just achieved first flight over the sands at Kitty Hawk. And then I were to tell you, ‘Oh yeah, in a few years we're going to have these planes used in World War I. And then in 1914, we'd have the first airline going between Tampa and St. Petersburg.' You'd say, ‘You're crazy,' right? The beauty of the intern survey is it gives the Morgan Stanley research department and our clients an opportunity to engage that surface area with that arising – not just the business leader – but that arising tech adopter. These are the people, these are the men and women that are going to kind of really adopt this much, much faster. And then, you know, our generation will get dragged into it eventually. So, I think it says; I think 61 percent expressing even some interest. And then 24 [percent], I guess, you know… The vast majority, three quarters saying, ‘Yeah, this is happening.' That's a sign I think, to our clients and capital market providers and regulators to say, ‘This won't be stopped. And if we don't do it, someone else will.' Alex Straton: So, another topic, Generative AI. It should come as no surprise really, that 95 percent of interns use that tool monthly, far ahead of the general population. How do you see this shaping future expectations for mobility and automation? Adam Jonas: So, this is what's interesting is people have asked kinda, ‘What's that Gen AI moment,' if you will, for mobility? Well, it really is Gen AI. Large Language Models and the technologies that develop the Large Language Models and that recursive learning, don't just affect the knowledge economy, right. Or writing or research report generation or intelligence search. It actually also turns video clips and physical information into tokens that can then create and take what would be a normal suburban city street and beautiful weather with smiling faces or whatever, and turn it into a chaotic scene of, you know, traffic and weather and all sorts of infrastructure issues and potholes. And that can be done in this digital twin, in an omniverse. A CEO recently told me when you drive a car with advanced, you know, Level 2+ autonomy, like full self-driving, you're not just driving in three-dimensional space. You're also playing a video game training a robot in a digital avatar. So again, I think that there is quite a lot of overlap between Gen AI and the fact that our interns are so much further down that curve of adoption than the broader public – is probably a hint to us is we got to keep listening to them, when we move into the physical realm of AI too. Alex Straton: So, no more driving tests for the 16-year-olds of the future... Adam Jonas: If you want to. Like, I tell my kids, if you want to drive, that's cool. Manual transmission, Italian sports cars, that's great. People still ride horses too. But it's just for the privileged few that can kind of keep these things in stables. Alex Straton: So, let me turn this into implications for companies here. Gen Z is tech fluent, open to disruption? How should autos and shared mobility providers rethink their engagement strategies with this generation? Adam Jonas: Well, that's a huge question. And think of the irony here. As we bring in this world of fake humans and humanoid robots, the scarcest resource is the human brain, right? So, this battle for the human mind is – it's incredible. And we haven't seen this really since like the Sputnik era or real height of the Cold War. We're seeing it now play out and our clients can read about some of these signing bonuses for these top AI and robotics talent being paid by many companies. It kind of makes, you know, your eyes water, even if you're used to the world of sports and soccer, . I think we're going to keep seeing more of that for the next few years because we need more brains, we need more stem. I think it's going to do; it has the potential to do a lot for our education system in the United States and in the West broadly. Alex Straton: So, we've covered a lot around what the next generation is interested in and, and their opinion. I know we do this every year, so it'll be exciting to see how this evolves over time. And how they adapt. It's been great speaking with you today, Adam. Adam Jonas: Absolutely. Alex, thanks for your insights. And to our listeners, stay curious, stay disruptive, and we'll catch you next time. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.