Podcasts about Morgan Stanley

As AI agents gain access to sensitive enterprise systems, companies need new ways to control what they can do. Meta Marshall breaks down the emerging market for agentic identity security.Read more insights from Morgan Stanley.----- Transcript -----Meta Marshall: Welcome to Thoughts on the Market. I'm Meta Marshall, Morgan Stanley's U.S. Cybersecurity and Telecom & Network Equipment analyst. Today: AI assistants are starting to act on our behalf at work, which brings up a critical question. What should these agents be allowed to do? And how should those permissions be granted? It's Tuesday, September 1st, at 10am in New York. More and more, AI is helping us get through the workday. We ask it to summarize documents, analyze data and take notes during meetings. Increasingly, though, these tools are moving beyond just answering questions to acting on our behalf. Suddenly, the security challenge shifts from managing a tool to governing a whole new digital workforce. In coming years, this problem should get bigger as we estimate seeing 79 AI agents and 109 machine identities for every human employee. Now, traditional identity security at work was built to answer two basic questions: Who are you, and what can you access? Think of it as your office badge. It identifies you and determines what doors you can open. AI agents, however, make that question much harder to answer. They can operate autonomously, move across applications and databases, collaborate with other agents. They take actions without direct human involvement.So, companies need to know not only what an agent can access, but why it needs access, for how long, and what it actually did. That's the core foundation of agentic identity solutions. The risk environment from this problem is already substantial. About 80 percent of breaches in the work environment today involve stolen or misused credentials. Nine out of 10 organizations experienced an identity-related breach in the past year, and 83 percent experienced at least two. Now add potentially hundreds of machine and AI identities for every human; each operating continuously and at machine speed – and the problem is much larger.One solution to managing AI agents is zero standing privilege. Instead of giving an agent permanent access, you give it permission for a specific task and revoke that permission when the job is done. Here's the issue though: Today, only 39 percent of privileged access is managed through this just-in-time or zero standing privilege architecture. And the reality is that humans can't approve every request. More of those decisions will need to happen automatically, in real time, through what's known as runtime governance. We estimate, as a result, that agentic identity alone could become roughly a $33 billion global opportunity in our base case, which brings the overall identity market opportunity to more than $60 billion in coming years. This need for agentic identity coming from AI could also push a historically fragmented industry towards a more unified platform. In one industry survey, 85 percent of organizations said fragmented identity systems delay their human response to identity threats, with respondents citing an average of 12 hours needed to respond per incident. We think that favors platforms that can manage human and machine identities together and make security decisions dynamically, overall making a more secure environment. This transition won't happen overnight. Agentic identity products are still early, and we don't expect an immediate financial impact. But as enterprises move from experimenting with AI agents to deploying them more broadly, spending to secure those agents could become a more meaningful growth tailwind in 2027. The longer-term growth opportunity comes down to a simple dynamic: more agents, with more autonomy, will require more control. And that could make identity security essential to scaling AI across the enterprise. 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.

Younger generations are reshaping caffeine consumption. Our U.S. Household Products and Beverage Analyst Dara Mohsenian discusses how the growing appetite for energy drinks could influence beverage habits for years to come. Read more insights from Morgan Stanley.----- Transcript -----Dara Mohsenian: Welcome to Thoughts on the Market. I'm Dara Mohsenian, Morgan Stanley's U.S. Household Products and Beverage Analyst. Today, we're going to talk about how the next generation of U.S. consumers is really redefining their daily caffeine boost. It's Monday, August 31st at 10am in New York. For generations of Americans, caffeine has been synonymous with coffee. You wake up, make a pot, or stop at a coffee shop and start your day. But the picture today is different. Younger consumers have grown up with many more choices to jumpstart their day. Walk into a convenience store, gym, or college library these days, and you'll see that energy drinks are increasingly becoming an alternative for getting their caffeine boost. The reason people are drinking more of these caffeinated beverages is pretty straightforward. They want more energy. Among consumers who increased their energy drink consumption over the prior three months, 61 percent said they needed more energy. Experimentation is important, too. 44 percent cited trying new flavors, and 37 percent said they were trying new brands. Our survey of roughly 3,000 U.S. consumers points to significant runway for energy drinks going forward. When we spoke to current energy drink consumers, a net positive 19 percent expected to increase their consumption over the next three months. That's well above our prior surveys and is true for both men and women. Perhaps more interesting is who expects to drink more. Demographics have always been a key driver of energy consumption. The younger generation is increasingly choosing energy drinks over, historically, coffee and carbonated soft drinks. In our survey, importantly, if you look at the 25- to 34-year-old and 35- to 44-year-old age groups, they actually showed the strongest forward intentions to increase consumption. This means that the consumers who embrace energy drinks at the very young ages don't appear to be aging out of the category as they become older. They're taking the habit with them, essentially. It's also important to point out that caffeinated drinks is not a zero-sum game. Yes, the generational preferences are shifting, but the total pie is really growing here. Energy drinks is the biggest share gainer within caffeinated drinks, but only 20 percent of incremental energy drink consumption in our survey came directly from switching from coffee, and 22 percent directly from switching from carbonated soft drinks. So, most of the demand is actually incremental to caffeinated drinks in general. Going forward, we do expect energy drinks to be the highest growth segment within caffeinated drinks, growing at a high single-digit rate. We're even seeing it replace areas such as alcohol and snacks as it's moved to that affordable indulgence. And that's particularly driven by GLP-1, also accentuating the need for caffeine for consumers who are losing weight and have less energy.So, we see robust high single-digit energy category growth as likely to continue. That's been the compound rate, 9 percent over the last 15 years. Going forward with the demand drivers we talked about in a rational pricing environment, we see that likely to sustain. And much of the energy top-line momentum has been supported by new products and innovations. That includes zero sugar drinks. They're perceived as better for you. They're attracting new consumers, particularly women. And also, older consumers are sticking with the products as they age. Energy drinks have also become more affordable versus other beverage categories, particularly beverages, where the price increases have been sharper. Convenience is another part of the appeal. Among consumers who recently switched from coffee to energy drinks, 57 percent cited more caffeine per beverage and 45 percent pointed to convenience. Nearly half preferred the flavor of energy drinks, while 45 percent cited greater flavor variety. There may also be room for energy drinks to show up in more places. In our survey, 47 percent of consumers said they would buy more energy drinks if they were available in vending machines, 46 percent in fast food and fast casual restaurants, 37 percent in coffee shops, and this is showing up in custom energy drinks at a lot of the coffee shops covered by my colleague Brian Harbor. Again, it's expanding the pie. It's not just about taking share from carbonated soft drinks or coffee. So, America's caffeine habit is really enduring, and it's expanding. Younger consumers, they have more flavors, more formats, more ways to fit caffeine into different parts of the day, and those caffeinated preferences don't appear to be tapering off as consumers age. 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.

Our Head of U.S. Public Policy Research Ariana Salvatore looks at what the midterms may reveal about politician's appetite for tackling the faster-than-expected increase in the U.S. debt.Read more insights from Morgan Stanley.----- Transcript ----- Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of U.S. Public Policy Research at Morgan Stanley. Today, why fiscal is back in focus and what we can learn about the broader debt trajectory from the upcoming midterm elections. It's Friday, August 28th at 10am in New York. Fiscal policy has moved back onto investors' radars following Treasury's recent buyback announcements. Those came in the same week that total U.S. debt crossed $ 40 trillion for the first time, a milestone that arrived months earlier than most people expected. As my colleague Andrew Sheets puts it, that's a big number. But the more useful question isn't the number itself. It's whether all this debt is starting to act as a brake on the economy.We don't quite yet see a credibility problem in the Treasury market, but that's exactly why fiscal is back in the conversation. And it sits against a bigger backdrop. The U.S. continues to run large deficits in an economy that isn't in a recession. Our economists expect the deficit to stay around 6 percent of GDP through 2027. And voters are clearly concerned about elevated debt levels. So why isn't fiscal austerity coming up more in DC? Simply put, we think the political incentives point the other direction. At the risk of oversimplifying, fiscal consolidation or deficit reduction means either less spending or more taxes. And the political costs of those choices land immediately. We think neither party, therefore, has the incentive to take on that type of policy change – if we don't see a meaningful cliff or a risk to existing programs, especially into an election. But what about after? We think the midterms won't in and of themselves be a catalyst to fix the debt trajectory. But they can tell us something about where this goes next. And I'd point to two things in particular. The first is Social Security. It's not likely to be the headline issue in November, but we could see a useful test case for the debt conversation more broadly because the deadline is creeping closer. The latest trustees report projects the retirement trust fund will become insolvent in the fourth quarter of 2032. And at that point, it could only cover roughly 78 percent of scheduled benefits without a change in law. Now, that's likely to matter more in 2028 than in this cycle, since whoever wins the White House that year will be in office when it hits. But the midterms can still show us where the politics are consolidating. Recent polling points to a fairly consistent pattern. Voters want lawmakers to act. They prefer raising taxes on high earners over broader benefit cuts. And they're notably more open to trimming benefits when it's targeted at the top of the income distribution. That likely explains why a number of 2026 candidates have converged on lifting the payroll tax cap, while some Republicans have largely retreated from campaigning on things like a higher retirement age. Watching which of those messages actually wins, especially in Senate races like New Hampshire or Maine, where a significant share of the electorate depends on these benefits, could provide some useful hints with respect to which of these policy changes actually resonate with voters and end up reflecting the eventual fix. The second is the broader fiscal landscape after the election. If we get a divided government in November, that typically means more fiscal noise around the recurring deadlines, like government funding and the debt ceiling. Those two matter for markets in very different ways. A shutdown's bigger effect tends to be indirect. So, think delayed or lower quality government data since agencies can end up working from smaller survey samples. That leaves investors and the Fed making decisions with less complete information for weeks at a stretch sometimes. The debt ceiling is more direct. That shows up most clearly in the Treasury bill market. Bills maturing around a potential deadline tend to cheapen relative to other short-term benchmarks as investors have to price default risk into that narrow window. And that's the case even when a resolution is still the base case. So, here's the through line: fiscal likely isn't about to become Washington's top priority just because debt crossed $40 trillion. But the midterms are a chance to see whether the political incentives are starting to shift – on Social Security specifically, and on the broader appetite for political fights around funding deadlines more generally. Either way, we think fiscal policy is set to stay in the headlines in the years to come. And especially so as we head into the 2028 presidential election season. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen. And share your Thoughts on the Market with a friend or colleague today.

Investors are keeping a close eye on Jackson Hole for signals on the economic outlook and the path for rates. Our Chief U.S. economist Michael Gapen joins Global Head of Macro Strategy Matthew Hornbach to discuss whether markets get what they want—or what the Fed needs.Read more insights from Morgan Stanley.----- Transcript -----Matt Hornbach: Welcome to Thoughts on the Market. I'm Matthew Hornbach, Global Head of Macro Strategy at Morgan Stanley. Michael Gapen: And I'm Michael Gapen, Chief U.S. Economist. Matt Hornbach: Today, we'll be discussing the Jackson Hole Economic Symposium and Chairman Warsh's opening remarks. It's Thursday, August 27th at 10am in New York. So, Mike, let's get right into it and talk about the upcoming opening remarks by Chairman Warsh at the Jackson Hole Economic Symposium that will be delivered to the public at 10 am tomorrow, Friday. How are you thinking about what to expect from those opening remarks? Michael Gapen: Well, historically, and by historically, I mean in a post-2008-2009 world, Jackson Hole has been used, not every year, but frequently as a venue to communicate to markets. The longest gap on the Fed's meeting calendar is between the July and September meetings. So, Jackson Hole falls between that and provides a useful opportunity to communicate what might be coming. That's what's normally been done. Warsh has repeatedly stated he wants the Fed to talk less and communicate less and say less. So, I don't think we will see or hear, in this case, a lot about his views about how the economy is operating today and how monetary policy may be conducted into year-end. So, I don't think we'll hear a lot about, say, the December; the outlook for the economy from September to December, and what it might imply for interest rate policy or balance sheet policy. So, little in the way of near-term forward guidance. I do think, however, he did say in the July press conference that the venue would be good to tackle some of these big questions that he has talked about, that he's created these task forces for. So, whether it is the balance sheet or the inflation framework, or communication or AI and productivity or data quality and so forth. This would provide, I think, a reasonable opportunity for him to start talking about that. I don't think maybe we'll get a lot of conclusions. But I would look for commentary that's more in the question; or in the spirit of those big questions and less about the near-term conduct of policy.So maybe not what markets want, but this is what markets will get. Matt Hornbach: Just rewinding a bit, the conference itself is on a somewhat of a niche topic. What exactly is the conference about? And, in terms of the papers that get released at the conference, do you have any sense as to where they might be headed? Michael Gapen: So, the topic of this conference, the economic symposium, as you noted, is Financial Innovation: [its] Implications for [the] Payments [system] and [monetary] Policy. So, I would expect there to be a lot of sessions for things like central bank digital currencies or stable coins or Bitcoins. Near money type innovation that has happened in recent years, which leads to things like competition for deposits from the non-financial sector vis-a-vis the financial sector. So, a competition of near moneyness to money, if you will. Its implications for the interaction between the non-financial system and the financial system, competition for deposits. Does it create risks around financial disintermediation? And therefore, how might the regulatory environment and monetary policy work in that world? So little more, I'll call it, esoteric and maybe arm's length from the day-to-day conduct of policy. But I would look at the speeches probably in that vein. Deposit competition, financial market stability, and what kind of regulatory framework might you need to ensure we can still conduct policy effectively in that world. Matt Hornbach: Sounds like an exciting set of papers… Michael Gapen: Yes. Yes. Matt Hornbach: … for professors to read through. Michael Gapen: This is why they don't often leak the schedule too far in advance, right? We all might decide not to listen. Matt Hornbach: Indeed. Well, it is the end of August, and people are probably still on holiday here and there… Michael Gapen: I'm doing my best, but you called me in today. Matt Hornbach: Yeah, the least I could do. So, you did mention that this might be an opportunity for Chairman Warsh to maybe spotlight a bit these task forces and the topics that they're tackling, one of which is the inflation framework. And that word framework, I think, is important because the investors that we've been speaking with are frustrated that the Fed has not really laid out a framework – for monetary policymaking in this new era of Chairman Warsh, and his leadership at the Fed. So, I'm curious, if we're not going to get forward guidance on monetary policy and what will happen at the next meeting. And we're also not going to get much forward guidance on the framework that the Fed is using to decide on what to do with short-term interest rates. What are we meant to think about the framework? Michael Gapen: Yeah, I think ultimately, of course, we're going to need to know this, and this is what economists would refer to as the ‘difference between forward guidance and the "reaction function." So, the framework is really, you've got a set of tools, how do you intend to use them to achieve your objectives? A conventional Fed would say, "Well, if interest rates are low and inflation's too high, then we should raise rates," right? So high inflation brings high interest rates, low inflation brings low interest rates. All else equal, there's still the employment side of the mandate, of course. And the market had that view, at least initially, right? As we were in the June-July period and Warsh was talking hawkishly, the curve generally flattened. Expectations for front-end yields moved higher, and inflation-fighting credibility maybe kept the back end stable or brought the back end down. So, you could argue the markets looked at Warsh as maybe bringing a conventional reaction function and a conventional framework. But in the June and July FOMC meeting and in conversations with the press during the press conferences, Warsh – I don't want to say backtracked. He just didn't validate that and did say that we will achieve price stability. Didn't quite say how he would use the tools to do that. And even suggested maybe interest rates weren't the primary mechanism with which to influence, create, deliver price stability. So, the curve then steepened out. So, I think the market is wondering what Fed chair we have and what his reaction function is? And if inflation's running hot, is it an interest rate answer or is it a balance sheet answer? I'd also just add one last thing, Matt, is it makes a difference what the rest of the 18 people on the FOMC think. [Be]cause I think you would agree, and I'll put forward right now, I think they have a largely conventional view. Half of the committee thought it was time to raise rates in June. So, we have a balance between not knowing the chair's framework and having to intuit it. Or hope that we hear more. But then also knowing the other 18 who could band together and have greater voting power act in a largely conventional framework. I think that's the debate and the dilemma that we're all dealing with. Matt Hornbach: Yeah, I think investors, have certainly expressed frustration about the lack of guidance in any form or fashion. Perhaps with the exception of the balance sheet; we have a general idea that the balance sheet will be smaller in the future. And we have a sense from what Chairman Warsh has said in front of the House of Representatives during his semi-annual testimony that any changes would happen gradually over time. But, in terms of the pricing of the July meeting, and what happened at the July meeting, investors were very disappointed that the Fed did not go ahead and raise rates in July. Now, the market was only assigning about a one in three odds of a rate hike in July. And so, the fact that the Fed did not go ahead and raise interest rates in July was not a surprise in the sense of market pricing. But I do sense that investors were frustrated; that because they didn't get much forward guidance going into the July meeting, that the market might not have priced more probability on a July rate hike because the Fed, in fact, did not signal that they were leaning in that direction. But I see it as somewhat ironic because it seems to me, and I'd like to get your view on this. It seems to me that Chairman Warsh doesn't want to provide that type of specificity. He'd rather have the markets tell him what to do at an upcoming meeting, as opposed to him telling markets what to do at an upcoming meeting. How do you think about that? Michael Gapen: Oh, I think it's… [It] strains credibility to think that by saying nothing, you get the market's interpretation of the economy, data, and events – without the market thinking what the Fed thinks about it. I don't think that there's a world where you get the unvarnished market expectation independent of the Fed. So, I don't personally agree in the analogy of the market should play the ball and not the referee. The Fed is not a referee in markets. The Fed is a player in markets. Monetary policy acts through financial markets to achieve a set of financial conditions to deliver price stability and maximum employment. So, the Fed and markets are on the field at the same time. The Fed, in some ways, is the 800-pound gorilla on the field at the same time. So, everybody else on the field has to know what the gorilla is doing in order to do what they're supposed to do. Yes, there's always some circularity between Fed communication and market reaction to that. But I think that's natural and normal and important in making monetary policy effective – meaning it has to transmit through financial markets. And so, you could diminish the effectiveness of monetary policy if you don't tell the market what, at least what your framework is and what your reaction function is. And the tools that you intend to use and how you would intend to use them. Then the market could be an inefficient transmitter of monetary policy. So, I disagree with the notion that by saying less, the Fed learns more. But that's my view. I'm one of many. That's my opinion. The chair obviously has a different view. Matt Hornbach: Well, I can certainly understand not wanting to be the referee, especially after what we saw at the World Cup. There were a couple of games where the referee… Michael Gapen: And nobody likes the referee. At least half the people are upset with the referee. Matt Hornbach: Indeed. Okay. So, Mike, I think we're going to leave it there. Michael Gapen: Thanks for having me on, Matt. Matt 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 Global Head of Fixed Income Research Andrew Sheets discusses when and how higher yields and mounting U.S. debt could become more than abstract concerns.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley. Today, at what point do higher yields and higher debt actually matter? It's Wednesday, August 26th at 2pm in London. In its first 240 years, the United States of America accumulated roughly $20 trillion in federal debt. The country has borrowed another [$]20 trillion in just the last 10. The question for investors is when this debt load will act as a brake on economic activity? Or, worse, create stress that disrupts today's relative calm?So, let's start with the first question. For economic activity, the bar seems pretty high. You see, even with all the activity around AI, U.S. corporate debt as a share of the overall economy is broadly unchanged in the last decade and actually lower than where it was before the pandemic. The balance sheets of the household sector in the U.S. are even stronger. Household debt to GDP is lower than where it was prior to COVID and lower than where it was in the year 2000. And this may even understate the strength – because much of this debt is locked in at historically low mortgage rates; while household assets, the other side of the balance sheet, have soared to record levels.That may help explain why both consumers and businesses have remained more resilient than expected this year despite the higher interest rates and energy prices. This divergence of trend between public and private balance sheets is also global. Europe has also seen higher government debt offset by even more private sector de-leveraging, while Japan has seen rising public borrowing and pretty stable private sector leverage. To some degree, this divergence between the public and private sides of the economy reflects a policy choice. Governments determine how to balance taxation and spending. And many countries, not just the U.S., have reduced taxes over the last decade while allowing public borrowing to increase. A deterioration of public sector finances relative to private sector finances – it's not especially surprising given that choice. If strong balance sheets are helping U.S. households and companies be less sensitive to higher rates, where should we look for stress? Well, for all of this debt, the U.S. bond market is actually still pretty well-behaved. U.S. inflation expectations are roughly unchanged year to date. Expected bond market volatility is historically low.Indeed, one reason that recent intervention by the U.S. Treasury into the bond market was such a surprise to investors was the lack of these usual stress markers. Instead, the point at which these higher yields might have a larger market impact may be up to another factor: asset allocation. Today, 30-year Treasury bonds yield about 3 percent more than expected inflation over that period. Long-dated U.S. investment-grade corporate bonds once again yield more than 6 percent. And so, the question of when higher yields begin to matter may be less about when businesses stop borrowing or consumers stop spending. And be more about when investors decide that bonds offer better value than stocks. So far, Morgan Stanley Research is not seeing clear evidence of that shift. Fund flow data and market correlations do not suggest a significant reallocation away from equities, and strong earnings growth is helping support the equity valuation case. But these are metrics that we'll be watching. In the meantime, we think that rising U.S. debt and Treasury market intervention may weaken the U.S. dollar, especially against a high-yielding currency with much, much lower debt levels – the Australian dollar. Thank you as always for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today.

What happens when you reach a certain level of success and realize the financial strategies you've been using may no longer fit where you are today?In this episode of Capability Amplifier, I sit down with Dana Cornell, founder of Cornell Capital Holdings, for a fascinating conversation about how successful business owners can think differently about taxes, investing, income, risk, and protecting what they've built.Dana has seen both sides of the financial world.He managed more than $1.4 billion at Morgan Stanley, served hundreds of clients, and eventually gained access to the advanced planning strategies being used with families at a very different level of wealth.What he saw changed the direction of his career.Dana realized there was an enormous difference between traditional wealth management and the coordinated approach available to ultra-wealthy families. Eventually, that gap became big enough that he decided to leave and build something different.Dana and I dug into what he learned behind the scenes, the mistakes successful founders often make with their own money, and why your financial strategy needs to evolve as your business and wealth become more complex.In this episode, Dana and I break down:Why Dana walked away from a $1.4 billion practice at Morgan Stanley?The 1% advisory fee that may actually be costing you closer to 20%Why do the ultra-wealthy keep most of their liquid capital out of stocks and bonds?What founders should understand about private and pre-IPO investing?Why the tax planning on a business or real estate sale has to happen before you sell?The risk most wealthy families overlook, and it isn't the marketEveryone has a CPA, an attorney, and an advisor. Almost nobody has a quarterbackOne of my biggest takeaways from this conversation is that financial complexity requires coordination.You can have a great CPA, a great attorney, and a great financial advisor. But if nobody is looking at the entire picture and taking responsibility for how all those pieces work together, opportunities can easily get missed.For successful founders and business owners, this is an important conversation about making sure the wealth you've worked so hard to create is being managed with the same level of intention you bring to your businessTake Dana's free financial diagnostic quiz (10 questions or less — get your wealth score and freedom score): https://cchquiz.comWant Dana's tax calculator? Email info@cornellcapitalholdings.com and he'll send it to you personally. Take the report to your CPA.DISCLAIMER: This episode is for educational and informational purposes only and is not financial, tax, investment, or legal advice. Dana Cornell is affiliated with Cornell Capital Holdings LLC. Nothing here is an offer or solicitation to buy or sell any security. Certain investments discussed may only be available to accredited investors. Consult your own CPA, attorney, and financial advisor before making any decisions.TIME STAMPS[00:00:00] Why Dana Cornell Left Traditional Wealth Management[00:03:42] Building a Career From Door-to-Door Prospecting[00:06:46] The Moment That Changed Dana's Career[00:09:31] How the Ultra-Wealthy Approach Financial Planning[00:12:04] Three Strategies That Move the Needle[00:14:10] Preserve, Produce, Protect, and Pass[00:17:21] Understanding the Real Cost of Advisory Fees[00:20:31] Alternative Investments and the Family-Office Model[00:25:08] Private and Pre-IPO Investing[00:29:47] Planning Around Business and Real Estate Sales[00:32:21] Building a Coordinated Team of Advisors[00:35:47] The Financial Diagnostic and Next Steps PS – When you're ready, here's how I can help: Want to find the hidden revenue in your business? Grab a Cup of Coffee with me: AiAccelerator.com/1kReady to reinvent yourself, your business, and your brand, and create “Your Next Act”? Watch this.Discover More

P.M. Edition for Aug. 25. National affairs reporter Kris Maher discusses how the AI surveillance company has become the target of bipartisan anger. And Canada retaliates against U.S. tariffs with some of its own. Ottawa-based reporter Paul Vieira says the tariffs are strategic—they target products from states in play in the U.S. midterm elections. Plus, Dolly Parton has died. The songwriter behind hits including “Jolene,” “9 to 5” and “I Will Always Love You” was 80 years old. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Paul Walsh, Michelle Weaver and Daniel Blake discuss how thematic mapping can help investors separate true beneficiaries from market hype and identify risks hiding beneath the surface.Read more insights from Morgan Stanley.----- Transcript -----Paul Walsh: Welcome everyone to Thoughts on the Market. I'm Paul Walsh, Morgan Stanley's Head of Research in Europe. Michelle Weaver: And I'm Michelle Weaver, U.S. Thematic and Equity Strategist. Daniel Blake: And I'm Daniel Blake, Head of Asia Thematic Strategy. Walsh: And today we're discussing why thematic investing may be entering a new phase – moving from simply identifying big ideas to systematically measuring them.It's Tuesday, the 25th of August at 2pm in London. Weaver: It's 9am in New York. Blake: And it's 9pm in Singapore. Walsh: Daniel, let's kick our discussion off today. Thematic investing has become one of the most important ways for investors to think about long-term opportunities. But your latest work suggests the framework itself is evolving. So, what's changing? Blake: Well, if you look at where we've started. So thematic investing has been narrative-driven, focusing on identifying major structural trends for investors. So, at Morgan Stanley, we've identified core themes of artificial intelligence and tech diffusion, the future of energy, societal shifts, and the transition to a multipolar world. So, what's changing is that investment approaches are becoming much, much faster. So, we're now seeing clients deploy agentic AI to drive trade recommendations. And sure, AI can read a new 100-page thematic report from Morgan Stanley faster than humans. But for the right conclusions, it's important to connect these models with high-quality data sets. And we think that's going to be helpful for human investors as well. So, this is where the third phase of thematic investing comes in. The first phase was identifying secular trends that cut across markets and industries. The second phase was creating investable products around those themes. But this next phase is about measuring that exposure systematically in real time. So, this allows investors and their AI agents to identify whether a theme's importance is broadening or fading and to track individual companies' exposure to that theme over time. Walsh: So, the thematic investing is moving from narrative-driven to a higher velocity data-driven approach. And I guess that's where our thematic mapping exercise really comes in. So, Michelle, when investors hear the term thematic map, they may think it's just another screening tool. But it's much, much more than that, isn't it? Weaver: Absolutely. The easiest way to think about it is it's a research framework that sits on top of traditional sector and regional analysis. Historically, investors organize portfolios by country, sector, or industry group, and those verticals are still very important. But increasingly, the biggest investment forces cut horizontally across those boundaries. AI touches software companies, industrials names, healthcare, financials, and it's even had a huge impact on the utility sector.Thematic mapping helps us identify where those exposures exist across thousands of stocks, and importantly, how significant those exposures are – all with the help of our analyst experts. And the innovation isn't simply identifying if a company's exposed to AI, energy transition, or defense spending. It's determining whether that exposure is central to the investment thesis, just supportive or insignificant. And that's very different from traditional thematic baskets. Walsh: So, we identify the exposure, but the idea of significance seems particularly important because investors constantly hear companies talking about themes on earnings calls for example and in their public communications. But how do you separate genuine exposure from a more marketing-driven language around thematics, Daniel? Blake: This we see as the most valuable and ultimately human-driven part of the framework. So, as an example, we know that many companies are outlining their AI initiatives, and not all of them will end up being AI beneficiaries. So, the key question is how a given theme will impact revenues, margins, competitive positioning, and valuations. And this requires the deep knowledge of both the industry and the company, as well as where things are going. And so that's where our analysts come in. Across all countries, all sectors, mapping the materiality of their entire coverage, that's almost 4,000 companies, to every global theme in real time. Sp. our job in the thematic strategy team is to coordinate the framework, help identify emerging themes, and draw out the insights and recommendations. But the core insights are really coming at the analyst level, company by company. Walsh: And so, to your point, Daniel, it's about the analyst overlay in terms of significance that is really important. So, investors really shouldn't think of thematic exposure as a simple yes or no question… Blake: Exactly. That's really the new innovation in this framework, and most companies will sit somewhere along that spectrum for a given theme. And there's value in tracking how that position is changing over time. Walsh: Yeah, rate of change is clearly critical. And Michelle, one of the things I found particularly interesting is that the framework isn't just about identifying winners. It's also about identifying companies that may be challenged by structural change as well. Why don't you help our listeners understand why that's so important? Weaver: Because every major theme, yes, creates a lot of opportunity, but it also creates disruption. And I think investors naturally focus on beneficiaries. Where are we looking on the long side? But in many cases, understanding who might be negatively exposed can be just as valuable. If you think about AI, there are obvious beneficiaries, whether those are the big enablers or they're companies adopting the technology successfully. But there could also be companies facing pricing pressure, margin pressure, or broader disruption because of that same theme. And that's equally true whether we're thinking about the future of energy, societal shifts and big demographic realignments, or the multipolar world. And a complete thematic framework should help investors understand both parts of that equation. And this is becoming increasingly important as markets move from broad thematic enthusiasm towards more selective stock picking. Walsh: Absolutely. The ability of the thematic mapping to help us understand both sides the equation clearly incredibly important. Let's bring it back to investors' portfolios. Daniel, how should investors think about thematic mapping as part of portfolio construction rather than simply stock selection? Blake: If you're looking at that portfolio construction level, whether you're a retail investor or you're one of the largest asset owners of sovereign funds, one of the biggest benefits is for revealing and managing hidden exposures.So, an investor might believe that their portfolio is diversified with positioning across many sectors and markets. But when you use the thematic map to underline, to explore the underlying thematic exposure, you might find that many of these holdings are tied to the same structural trend. So, the thematic map allows investors to better diversify portfolios while retaining the best expressions of desired themes. And as you mentioned, it's not just a screening tool. But it's pretty useful as a screening tool as well if you want to take exposure to a given theme overlay with valuations and preferences. It's very helpful for that reason as well. Walsh: Yeah, understood Daniel. And Michelle, as we look stock markets right now, how are you seeing the opportunities via the thematic mapping work that we've done? Weaver: Flagging potential rotations is another key part of what this analysis offers. And if we think about your question from a valuation perspective, AI adopters currently look relatively inexpensive, but they still offer strong expected earnings growth. And we're also seeing analyst sentiment beginning to improve. You're seeing a growing number of companies having their earnings estimates revised higher. We're also seeing a similar opportunity across our societal shifts themes. Valuations here are well below their typical levels over the past decade. And at the same time, we're also seeing earnings expectations improve here. Walsh: So, perhaps the biggest takeaways are that thematic investing is becoming more measurable, more transparent, and more integrated into portfolio management. It's no longer just about spotting the next big idea. It's about understanding where that idea exists, how much it matters, and of course, how it's evolving. Michelle, Daniel, thanks so much for taking the time to talk. Weaver: Great speaking with you Paul. Blake: Thanks for having us. Walsh: 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.

We're still surprised people did this but... 50+ founders worth $10M to $4B reveal their personal finances. Here it is: https://joinhampton.com/mw-wrWhy do we do this? Because if you're an aspirational person or someone who runs a business and is making money, it's incredibly challenging to figure out what to do. Information is impossible to find — and that's what we put together: the net worth reveal and why we do this podcast, Moneywise.He manages $1.5 billion for other people — and still tracks his own spending in a paper checkbook.Glenn Ullmann is a former Air Force pilot who left the military at 29 with a couple hundred thousand dollars, cold-called 200 strangers a day out of a Ponte Vedra phone book, and built Ullmann Wealth Partners into a $1.5 billion RIA that has never had a down year — including 2008. He stopped worrying about money somewhere north of $20 million. Now 63, he spends $30–40K a month, flies his own $1.25M Cirrus, gives more to charity than he can deduct, and still shows up to the office every day.This episode gets into the tension between saving and actually living: why Glenn tells clients with health issues to fly private before their kids do it with the inheritance, how a $10M portfolio pays you $300K a year in "rent" whether markets are up or down, and why he thinks stocks are a bad word. We also cover how he gave up 80% of his own firm to keep his partners, the paper ledger that runs his life, the client who started at $100 a month and now takes the best trips on earth, and why he'd tell a 20-year-old to study English or history instead of finance.Also, this podcast is made by Hampton, which is a community for founders doing on average $20 million a year in revenue. We saw a lot of these money conversations happening privately behind closed doors and we thought, "What the heck, let's make it public." If you are a founder, apply here: http://joinhampton.com/mwTimestamps:01:46 — Who Glenn is, what Ullmann Wealth Partners does, and why "returns don't matter if you rear-end Melinda Gates without an umbrella policy"04:16 — Growing up in his grandfather's plastics business, the Robin's-egg Cadillac, and the gold coin that says "your friendship means more to me than a pot of gold"06:26 — A Morgan Stanley account at 14, paper route money, and his first stock: Sears Roebuck07:44 — Nobody from his high school went to the military. He went to the Air Force Academy three days after graduation: "the best thing I ever did, other than marrying my spouse"11:50 — The Cirrus G7, the parachute that lowers the whole plane, and the button his wife can push if Glenn stops functioning mid-flight13:35 — From AWACS pilot to pharma rep to stockbroker: dialing 200 people a day, 10 conversations, one client17:45 — Net worth leaving the Air Force at 29 and the million-dollar goal on a piece of paper that "never happened"19:26 — The $2M–$20M client sweet spot, and why the firm has never contracted in 25 years — even 2007–200921:57 — Why he went from owning 100% of the firm to 20%: "How could they not have equity?"24:03 — The 11x17 "life map," and the client who was stabbed and left for dead in her New York apartment26:15 — HENRYs who save $10K a month and still need to be told to go enjoy the rest: "People get cancer. People die falling off a ledge."28:49 — "If you don't spend this money and fly first class, your kids will when you're dead"30:40 — The net worth where Glenn stopped worrying: "probably above 20"31:49 — Alimony, fun, and the pen-and-paper checkbook ledger a $1.5B wealth manager uses to track his Amex33:29 — The $1.25M four-seat plane, $40–50K a year to operate, and a $30–40K monthly burn before philanthropy35:10 — Giving appreciated stock and exceeding his deduction limit every year36:21 — Why he still goes to work at 63, the wingman system, three chronic illnesses, and "sometimes a founder needs to get out of the way"39:40 — The Melissa example: $100 a month in 1993 to the best trips on earth41:26 — Where to park $10M after a liquidity event: "you're going to collect around $300,000 a year in dividends and interest"42:55 — Not a real estate guy, the $100K driveway, and "I never invest in things that eat while I'm asleep"44:48 — 90% in global equity, and why "they're not stocks, they're companies"45:40 — Reframing an $80K private flight as a month and a half of portfolio income47:39 — What he'd tell a 20-year-old picking a major: English or historySponsors: Daily Body Coach - achieve your dream body with https://moneywise.dailybodycoach.comSubscribe to Moneywise: https://www.youtube.com/@themoneywisepodcastFollow Daniel on X: https://x.com/danielcberkListen on Spotify / Apple Podcasts: [search "Moneywise Hampton"]

Bonds may no longer provide the shelter investors have expected. Our CIO and Chief U.S. Equity Strategist Mike Wilson talks about the changing relationship between inflation, yields and risk.Read more insights from Morgan Stanley.----- Transcript -----Bonds may no longer provide the shelter investors have exMike Wilson: 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 the shifting landscape in macro markets.It's Monday, August 24th at 11:30am in New York. So, let's get after it.Over the past few weeks we've seen large moves in rates, oil, gold and crypto. What does it mean for equities? First, investors are still treating these markets as separate stories, when they are all part of the same regime shift that began with COVID. More than six years ago, in the depths of that recession, I argued investors should prepare for the return of inflation. That was a very out of consensus view. At that time, the world was obsessed with deflation, the 10-year Treasury yield was below 1 percent, stocks had been hit hard, and gold was sitting around $1,500 an ounce. But the policy response to COVID – what I called helicopter money – changed the game. It marked the end of the 40-year disinflationary regime and a very different investment environment for investors to navigate. It is also the foundation of our run it hot thesis. In a world where inflation has returned, cycles are likely to be shorter, policy more reactive, and leadership changes more frequent. That is very different from the 1982-to-2020 period. Then falling inflation and falling rates allowed economic cycles to stretch for eight or 10 years. We are now in a world that looks more like the post-World War II era: stronger nominal GDP growth, more persistent inflation, higher economic volatility, and a bond market that is no longer the tailwind it used to be for risk assets. In short, the great secular bull market in bonds ended with COVID. This has huge implications for investors of all stripes. My near term view on rates is also different from the mainstream. A lot of investors are saying rates are rising because of debt and deficits. I am not dismissing those factors. But I think the bigger driver is strong nominal GDP growth, which really is the result of aggressive fiscal policy since the pandemic. We are in an era of fiscal dominance, and in that environment the Treasury and the Fed are forced to find ways to fund deficits without breaking markets. That is how I interpret the Treasury's recent buyback activity. I don't think this is quantitative easing or yield-curve control. The scale of the program is not large enough. Instead, it's just another tool to maintain market functioning and stable financial conditions. So when I look at the large move in precious metals and crypto last week, to me it suggests that markets believe this is just a first step toward larger intervention – if financial conditions tighten further. For equities, this all reinforces the quality rotation we have been recommending. Since the peak rate of change in earnings revisions breadth in June, led by Semiconductors, the market has gone through a significant leadership change. Quality factors have started to outperform after a year of lagging, which is exactly what we would expect as a post-recession recovery matures. High free cash flow, high gross margins, stable sales growth, and low capex-to-sales factors have all been working. Some investors are frustrated that the S&P 500 barely sold off during the historic momentum unwind. But if quality is coming back into favor, that makes perfect sense. The S&P 500 is one of the highest-quality benchmarks in the world. Leadership at the stock level may continue to morph, but index leadership for the S&P is unlikely to fade – and may even get stronger. The near-term risk remains oil. Brent crude prices have moved higher over the past couple of weeks. And rising oil has historically been a much more reliable headwind for equities than falling oil has been a tailwind. Our still constructive equity view does not require crude to collapse. It simply requires crude to stop rising. If oil spikes again because the Strait of Hormuz remains closed, that could pressure input costs, push yields and bond volatility higher, and create another round of market instability. Bottom line, the run it hot regime is alive and well. It supports equities. But it also shortens cycles, increases rotations, and forces investors to be more tactical at times. I currently like large-cap quality stocks, AI adopters, and the S&P 500 over international peers. Hedge the oil risk with energy stocks and keep your head on a swivel as we navigate the next phase of this recovery and bull market. 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!

AI's enormous capital requirements are reshaping the way companies tap credit markets. Our Chief Fixed Income Strategist Vishy Tirupattur takes stock of this summer's key financing developments. Read more insights from Morgan Stanley.----- Transcript -----Vishy Tirupattur: Welcome to Thoughts on the Market. I am Vishy Tirupattur, Morgan Stanley's Chief Fixed Income Strategist. Today: Why the summer of 2026 is all about AI Financing and the evolution of credit markets. It is Friday August 21st at 2pm in New York. The summer of 2026 may ultimately be remembered not for a new model release or a breakthrough chip, but for developments in AI financing that highlighted how quickly capital markets are adapting to the demands of the AI buildout. The starting point of our analysis remains unchanged: the demand for compute continues to outstrip supply of compute, resulting in upward revisions in AI infrastructure capex expectations as hyperscalers commit additional capital to secure future capacity. Our equity research colleagues now estimate that the total capex for the four largest hyperscalers will rise 57 percent in 2027 versus 2026. These spending plans reflect growing conviction that such investments can generate 25 percent plus returns on invested capital. At the same time, the lag between capex deployment and monetization continues to pressure near-term cash generation, with our analysts' 2027 free cash flow estimates for the four hyperscalers continuing to move lower. To a credit analyst, what this means is that the result is a widening financing gap in 2027. That means AI-related credit issuance will remain substantial and may even need to increase further before cash flows from these investments begin to catch up. Developments in credit spreads this summer have been equally telling. Credit spreads for hyperscalers have widened meaningfully. More notable even than the absolute level of widening is the divergence across financing channels. For example, spread widening was most pronounced in unsecured bonds, where issuance volumes accelerated sharply and investors remained exposed to a broader range of risks tied to the AI investment cycle. By contrast, spread widening in data center ABS and CMBS was much more modest. These structures are backed by operating assets that have already been constructed, powered, and leased, with contractual cash flows largely established. Combined with a more measured pace of issuance, these characteristics helped insulate securitized credit products from the volatility seen in unsecured credit markets. The divergence across credit markets also reflects the differences in issuer incentives and sensitivity to funding costs, which will shape issuance volumes going forward. At the higher end of the quality spectrum, the major hyperscalers, with average ratings of roughly AA, combine substantial financing needs with significant ratings flexibility. Given their ROIC expectations, these issuers are relatively insensitive to modest changes in borrowing costs. Higher funding costs alone are unlikely to materially slow capital raising by the highest-quality participants in the AI ecosystem. The opposite is true further down the quality spectrum. Lower quality hyperscalers and data center developers, including former bitcoin miners and REITs, have less balance-sheet flexibility and lower tolerance for higher funding costs. For these borrowers, wider spreads represent a more meaningful constraint, making funding costs a natural stabilizer of future supply. The next phase of AI financing is also likely to look quite a bit different as incremental capex shifts from data center shells toward compute equipment, particularly servers and chips, as well as energy assets. While some of these assets have already been financed through high-yield bonds and leveraged loans, compute infrastructure is particularly well-suited to asset-level financing, creating a larger role for private capital. The emergence of large-scale component financing is likely to be enabled by the highest-quality issuers flexing their ratings as well as balance-sheet strength. We expect these issuers to increasingly provide backstops, credit support arrangements, and residual value guarantees, helping private capital underwrite ever-larger pools of AI infrastructure assets. As AI scales from a technology cycle into a capital cycle, understanding the nuances of financing is becoming increasingly important. In the next phase of the AI buildout, understanding the flow of capital may prove nearly as important as understanding the flow of innovation itself. AI is no longer just a technology story. It is increasingly a capital markets story as well. Thanks for listening. If you enjoy the podcast, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

For episode 764 of the BlockHash Podcast, host Brandon Zemp is joined by Joe Vollono the Chief Commercial Officer at STBL, where he leads global commercial strategy to scale the STBL Protocol and its RWA-backed financial ecosystem. Previously, Joe led Business Development for central banking and stablecoin (RLUSD) at Ripple, advising commercial banks, central banks, and finance ministries on digital asset policy, stablecoin design, and financial infrastructure. He has advised and presented to multiple international forums on stablecoins and tokenized assets, including the World Economic Forum, the United Nations, and the University of Oxford. Earlier in his career, Joe spent nearly a decade in capital markets at Morgan Stanley, where he was recognized as a Barron’s Top 50 Institutional Consultant (2020). He previously served as a nuclear-trained officer in the U.S. Navy Submarine Force. Joe holds an MBA from the University of Oxford, an MPP from Georgetown University, and a BS from the United States Naval Academy. He serves on the Board of the Marines Memorial Foundation.

A.M. Edition for Aug. 20. Nearly six months into the war, President Trump is pledging a ‘crushing economic operation' to isolate Iran. WSJ's Georgi Kantchev explains why a push to get just one country, the United Arab Emirates, to go along with that won't be easy. Plus, packaged-food giants head to the lab as users of weight-loss drugs say no to once-beloved foods. And we'll look at why more AI developers are likely to follow Google's lead in buying up a defunct airline's old emails and payroll files. Luke Vargas hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

AI is becoming a matter of national strategy, as countries seek more control over their own technology. Our Heads of U.S. Public Policy Ariana Salvatore and Global Thematic Research Stephen Byrd look at the race for AI sovereignty and its implications for investors.Read more insights from Morgan Stanley.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of U.S. Public Policy Research at Morgan Stanley. Stephen Byrd: And I'm Stephen Byrd, Head of Global Thematic Research at Morgan Stanley. Ariana Salvatore: Today, we'll be talking about AI sovereignty, what it means, what countries around the world are doing to advance their own goals, and what a more fragmented AI ecosystem could mean for investors.It's Thursday, August 20th at 2pm in New York. Stephen Byrd: And it's 9pm in Helsinki. Ariana Salvatore: As AI becomes more powerful and therefore more important to the global economy, countries are asking a basic question: How much of it do we need to control ourselves? That's at the heart of AI sovereignty, making sure governments around the world can access the computing power, data, energy, and technology they need even as geopolitical tensions may rise. Stephen Byrd: And that seems to fit into a broader trend we've been talking about for some time, a more multipolar world where governments are increasingly willing to intervene in markets around strategically important technologies. Ariana Salvatore: Exactly. We describe this as a potential ‘two worlds dynamic.' The U.S. and China have been gradually de-risking from one another, particularly in advanced technology. We've already seen policy tools, including export controls, tariffs, and incentives for domestic manufacturing. And as AI becomes more strategically important, our expectation is for policy intervention to increase rather than decrease. But what's interesting is that the U.S. and China aren't necessarily pursuing sovereignty in the same way. Stephen Byrd: So, let's unpack that. Can you start with the U.S.? What does the American approach look like? Ariana Salvatore: Yes. We think the U.S. is trying to do two things at once, basically. On one hand, it wants to preserve national security guardrails around some of the most sensitive AI capabilities. But on the other hand, it has an incentive to make sure the American AI tech stack is broadly available to allies and partners. So, there's an inherent tension there between those two objectives. Obviously, if you restrict access too much, you can encourage other countries to develop alternatives,. But if you allow unrestricted access, policymakers may begin to worry about losing control over strategically important technology. So, the way that we chart this is through a middle path. We think the direction of travel looks less like complete technological separation and more like selective access – tighter controls around sensitive capabilities alongside an effort to maintain the global reach of the U.S. AI ecosystem. Stephen Byrd: Whereas China's approach is more focused on building out an indigenous ecosystem. Specifically, we see policymakers in China pursuing greater self-sufficiency across the AI stack, from chips and computing infrastructure to cloud and models. Our China strategists argue that bifurcation could actually increase China's incentive to build a larger China-compatible AI ecosystem abroad, particularly across the Global South and other markets that aren't firmly aligned with the U.S. ecosystem. China's model emphasizes lower-cost models, open weight ecosystems, subsidized compute, cloud partnerships and infrastructure exports. So, the competition could increasingly be about not only which country has the most advanced model, but which ecosystem can achieve the widest adoption. Ariana Salvatore: That's right, and that brings us back to this idea of two worlds. So, Stephen, is the implication here that we're going to be heading toward two completely separate AI systems? Stephen Byrd: Not necessarily, I'd say. You know, the supply chains are still deeply interconnected, so our research does not suggest a sudden decoupling. But we could see greater duplication and less globally fungible infrastructure. Countries may increasingly want compute located domestically or regionally. Sensitive data may need to stay within particular jurisdictions, and companies may need different cloud cybersecurity or distribution arrangements in different markets. And that means the same global level of AI demand could require more physical infrastructure than it would in a completely integrated world. Ariana Salvatore: So, fragmentation, like other themes within multipolarity, are more economically inefficient. But potentially pretty important for the investment cycle. We think sovereign AI can make the system more redundant and more capital-intensive as a result. Our research teams think there are potential beneficiaries from that across semiconductors, data centers, networking, power, cloud, cybersecurity, and infrastructure software. Let's look at data centers specifically. If governments and enterprises increasingly require local hosting and greater control over sensitive data, you will inevitably need more geographically distributed infrastructure. Colocation operators, we think, can benefit because they provide the power, cooling, space, security, and interconnection that can allow customers to keep workloads in specific jurisdictions. So, the fragmentation we're talking about may introduce inefficiency at a system level while simultaneously creating incremental infrastructure demand. Stephen Byrd: And there's another constraint here that we probably shouldn't overlook, which is energy. Compute ultimately needs power. So, access to reliable, affordable electricity becomes part of a country's competitive position in AI, which ties into our politics of energy theme that we outlined in January of this year. But as we've also noted, that creates a political constraint. Our thematic work has highlighted rising concern around the impact of data center growth on power prices and on local infrastructure. This has really shown up in a big way in the U.S. And that can mean more pressure to protect existing rate payers, more emphasis on low-cost power. And greater interest in behind-the-meter or off-grid power solutions that allow data centers to secure electricity without putting the same pressure on the grid. Ariana Salvatore: Which suggests that there's a cost, in fact, to AI sovereignty as well. Stephen Byrd: Absolutely. And if countries want more domestic compute, duplicated infrastructure, localized supply chains, and greater redundancy, the system may become more resilient, but potentially more expensive – and we're certainly seeing signs of it being more expensive. Compute and power are already constrained in many markets. Add to that regulatory requirements, localization, and potential restrictions on technology transfer, and reducing dependence can carry an inflationary cost. So, for investors, I think the question isn't simply whether sovereign AI increases spending. It's also where that spending has to occur, what gets duplicated, and which parts of the stack become strategically indispensable. Ariana Salvatore: So, Steven, to frame this for investors, the way we see this theme unfolding suggests that sovereign AI reinforces rather than undermines the broader AI CapEx cycle. We think competition between the U.S. and China is intensifying. Countries outside those two ecosystems increasingly will want greater national resilience and flexibility. And that combination can support additional spending on compute, data centers, networking, and power for years to come. Lastly, an increasingly important question is who controls and supplies that infrastructure, energy, standards, and supply chains that will allow those models to operate at scale? Stephen Byrd: And that may ultimately be the most important thing to watch. Sovereign AI is another example of geopolitics moving directly into the technology investment cycle and potentially changing not only where AI gets built, but how much infrastructure the world needs to build it. Ariana Salvatore: Steven, we'll leave it there. Thanks so much for joining me. Stephen Byrd: Great to be here, Ariana. Ariana Salvatore: And 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.

In der heutigen Folge sprechen die Finanzjournalisten Nando Sommerfeldt und Holger Zschäpitz über die Unitree-Euphorie, gute Gründe für Gold und die große Bitcoin-Shorts-Liquidierung. Außerdem geht es um Merck & Co., Qiagen, Sartorius, Infineon, SUSS MicroTec, CXMT, Marvell Technology, Alphabet, Broadcom, KraneShares China Technology & Semiconductor STAR 50 Index ETF (WKN: A3CU6C), Walmart, Alibaba, Baidu, Deere, Goldman Sachs, Royal Bank of Canada, Jefferies Financial Group, Evercore, Barclays, Morgan Stanley, DocMorris, Amazon, Redcare Pharmacy, iShares Global Infrastructure UCITS ETF USD (thesaurierend) (WKN: A3D6N1), iShares Global Infrastructure UCITS ETF USD (ausschüttend) (WKN: A0LEW9). Am 2. Oktober findet unser „Alles auf Aktien“-Summit in Berlin statt. Mit dem Code „AAAFRIENDS“ sparst du 50 Prozent auf dein Ticket – aber nur unter folgendem Link: https://veranstaltung.businessinsider.de/event/financesummit26/summary?rp=c6dc55d6-6f4f-4fb4-b75f-3… Wir freuen uns an Feedback über aaa@welt.de. Noch mehr "Alles auf Aktien" findet Ihr bei WELTplus und Apple Podcasts – inklusive aller Artikel der Hosts. Hier bei WELT: https://www.welt.de/podcasts/alles-auf-aktien/plus247399208/Boersen-Podcast-AAA-Bonus-Folgen-Jede-Woche-noch-mehr-Antworten-auf-Eure-Boersen-Fragen.html. Hier könnt ihr den AAA-Newsletter abonnieren: https://www.welt.de/newsletter/article232797673/Alles-auf-Aktien-Der-taegliche-Boersen-Newsletter-fuer-WELTplus-Abonnenten.html Und – ganz neu: AAA gibt es jetzt auch auf Instagram: https://www.instagram.com/alles_auf_aktien/ Disclaimer: Die im Podcast besprochenen Aktien und Fonds stellen keine spezifischen Kauf- oder Anlage-Empfehlungen dar. Die Moderatoren und der Verlag haften nicht für etwaige Verluste, die aufgrund der Umsetzung der Gedanken oder Ideen entstehen. Hörtipps: Für alle, die noch mehr wissen wollen: Holger Zschäpitz können Sie jede Woche im Finanz- und Wirtschaftspodcast "Deffner&Zschäpitz" hören. +++ Werbung +++ Du möchtest mehr über unsere Werbepartner erfahren? Hier findest du alle Infos & Rabatte! https://linktr.ee/alles_auf_aktien Anzeige: Eight Sleep: Der Pod 5 reguliert die Temperatur im Bett automatisch, trackt Schlaf- und Gesundheitswerte ohne Wearable und kann so zu besserem Schlaf beitragen. Mit dem Code ALLESAUFAKTIEN erhaltet ihr auf https://www.eightsleep.com/allesaufaktien bis zu 350 Euro Rabatt. Impressum: https://www.welt.de/services/article7893735/Impressum.html Datenschutz: https://www.welt.de/services/article157550705/Datenschutzerklaerung-WELT-DIGITAL.html

From chocolate and sugar prices to energy markets and inflation, El Niño's impacts may soon reach far beyond the weather forecast. Our Latin America Agribusiness Analyst Julia Rizzo maps out where the pressure could emerge first.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Julia Rizzo, Latin America Agribusiness Analyst at Morgan Stanley. Today: how El Niño could move from the Pacific into commodity markets, grocery prices, and investor portfolios. It's Wednesday, August 19th, at 10am in Sao Paulo.You may not follow rainfall patterns in Brazil or cocoa-growing conditions in West Africa. But you immediately notice when chocolate, groceries, or electricity cost more. And you can connect the dots to El Niño -- a warming cycle in the Pacific Ocean that disrupts weather globally. It changes where rain falls and shapes the outlook for crops, power markets, transportation, and inflation. There is now a 95 percent chance of a very strong El Niño in the fourth quarter of 2026. It could end up being among the most powerful events in more than 75 years of recorded history. Timing and location matter greatly. Crop damage often depends on whether heat or heavy rain arrives during a narrow planting, flowering, or harvest window. The most direct effects are likely to appear first in commodities. Sugar is on the list of commodities most exposed to favorable price dynamics from weather conditions. Cocoa also looks tight. Grains are more complicated. Soybeans need evidence of a net South American production loss. Problems in northern Brazil may be offset by stronger crops in Argentina or Brazil south. Corn is even more dependent on timing. The key near-term catalyst remains U.S. weather and crops. What happens next matters well beyond agricultural markets. Food is the main channel through which El Niño reaches the broader economy, and the effect usually appears after a one-year lag. That makes inflation primarily a 2027 story. In Latin America, the largest incremental inflation risks are concentrated in Peru, Brazil, and Colombia, with most of the pressure arriving in 2027. That matters for central banks. Weather shocks can fade. So, policymakers often look through an initial rise in food prices. The greater concern is that higher food costs may begin to influence inflation expectations, wages, rents, or other prices across the economy. Colombia stands out as the clearest case where those second-round effects could complicate monetary policy. India and Indonesia also face meaningful economic exposure. Agriculture accounts for a large share of output and employment in these countries. India is especially sensitive. Agriculture represents about 18 percent of the GDP, 43 to 45 [percent] of jobs, while food makes up roughly 36 percent of the consumer price basket. Record food reserves may provide some protection, though a poor growing season could still weigh on rural incomes and keep food inflation elevated. The economic consequences will vary widely. Higher agricultural prices can support farmer income and benefit some parts of the food and agricultural supply chain. They can also raise costs for households, food producers, and businesses that depend on grains and sugar. Utilities may benefit in markets where hotter or drier conditions lift electricity prices, while heavy rainfall could disrupt transport routes and airports in those exposed regions. Historical asset-price signals are limited, so this is less of a broad macro trade than a detailed assessment of local exposure. Rainfall, crop timing, inventories, and the ability to pass higher costs on to consumers will determine where the pressure lands. El Niño may begin in the Pacific, but its market footprint can travel from cocoa farms in West Africa to a grocery aisle, a power grid, or a central bank meeting. Thanks for listening. If you enjoy the show, please leave us a review and share Thoughts on the Market with a friend or colleague today.

After a historic rally and a sharp correction, South Korea's equity market may be approaching a turning point. Our Chief Korea Equity Strategist, Joon Seok, explains that the next cycle will need stronger foundations and more sectors joining in.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I'm Joon Seok, Morgan Stanley's Chief Korea Equity Strategist.Today: Why Korea's equity market may be moving from a sharp reset toward a broader and more sustainable recovery.It's Tuesday, August 18th, at 2pm in Seoul.South Korea's stock market has delivered the kind of ride that makes even long-term investors check their phones more often than they would like. The KOSPI surged 101 percent in the first half of 2026, then fell more than 38 percent from its peak by July 30th. But the market now appears to be moving toward a more durable recovery.The first reason is valuation. Take the KOSPI's forward price-to-earnings ratio, which compares share prices with expected profits over the next year. It fell below five times, its lowest level since 2004. Our capitulation index also dropped to minus 2.53. This index combines market momentum with the breadth of the sell-off, so it helps show whether fear has become widespread. Readings below minus two have often marked troughing territory outside the major crises.The second reason is that forced selling appears to be easing. Now, we have seen leverage as a double-edged sword as leverage helped fuel the rally, but it also made the decline sharper as investors were forced to cut positions. Assets in leveraged single-stock ETFs have fallen about 70 percent from their June peak, and margin lending has also come down. Now, hedge funds have completed roughly three quarters of a typical risk-reduction cycle. Put simply, the most intense selling may already be behind us.Still, a healthier recovery needs more than a rebound by the tech sector. Tech remains central because AI infrastructure continues to drive demand for advanced memory. Morgan Stanley Research expects global spending by large tech platforms to reach 805 billion U.S. dollars in [20]26 and 1.2 trillion dollars in [20]27. That creates a lot of opportunity – but it also keeps markets sensitive to any change in capital spending, chip pricing or competition.The broader Korean economy offers support. Real GDP growth has exceeded 3 percent for two consecutive quarters, up sharply from 1.1 percent in 2025. Full-year growth is now likely to land in the mid-3 percent range; and generally, Korea's growth is around 2 percent. Importantly, the improvement is spreading beyond exports. Consumption is recovering, tourism has surpassed pre-pandemic levels, and the government is targeting 23 million foreign tourists this year.There are trade-offs. Inflation reached 3.2 percent in June, and the Bank of Korea raised its policy rate to 2.75 percent. A measured hiking cycle could take rates to 3.5 percent by the first quarter of 2027. Higher rates may help financial-sector earnings, but they also raise financing costs for households and businesses.The source of market liquidity is changing as well. Domestic retail investors drove much of the first-half rally, but tighter leverage rules mean foreign investors are likely to determine the next leg higher. Corporate-governance reforms and better capital management could also encourage broader international participation.We continue to see a path toward a KOSPI target of 9,000 by June 2027, with a bull case of 10,500 and a bear case of 5,500. The next phase should be steadier and more balanced. Industrials, financials, healthcare, communications, and consumer staples should also contribute alongside technology.Korea still has room to run. But the stronger signal may be quality – meaning earnings resilience, disciplined capital management and broader participation. The stock market's initial rally was fueled by speed and concentrated leadership. The next phase will require wider and more durable support.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.

The health and wellness space is crowded, with a lot of companies selling products that they claim will keep you healthier and more active into old age. To differentiate themselves, one company has organized an entire sporting event featuring elite athletes, but with a twist: competitors are allowed to use performance enhancing substances. Max Martin is the Co-founder and CEO of Enhanced, an elite sports competition and performance products company that trades on the NYSE under the symbol ENHA. With a unique background spanning technology, investment banking at Morgan Stanley, and entrepreneurial leadership, Max brings a distinctive perspective on building and scaling disruptive businesses at the intersection of technology, finance, and emerging markets.Today, Max takes us inside Enhanced, their groundbreaking sporting event, their unique product offerings, and why the emergence of peptides could create major tailwinds for the business.Highlights:What is Enhanced and How It Started (2:20)The Enhanced Games Explained (10:05)A Billion Eyeballs on Year One (11:25)Athletes as a Customer Acquisition Engine (12:50)The Peptide Opportunity (14:45)How to Become a Customer (17:05)Standing Out in a Crowded Market (20:25)How Big Is the Market (22:35)Why Enhancement Is for Everyone (25:05)What's Next for Enhanced (27:00)Links:Max Martin LinkedInEnhanced LinkedInEnhanced WebsiteICR LinkedInICR TwitterICR Website Feedback:If you have questions about the show, or have a topic in mind you'd like discussed in future episodes, email our producer, joe@lowerstreet.co

Our analysts Andrew Ruben and Nathan Feather discuss how AI shopping agents could transform how consumers discover, compare and buy products and the implications for eCommerce.Read more insights from Morgan Stanley.----- Transcript -----Andrew Ruben: Welcome to Thoughts on the Market. I'm Andrew Ruben, Latin America Retail and E-commerce Analyst at Morgan Stanley.Nathan Feather: And I'm Nathan Feather, U.S. Small and Mid-Cap Internet Analyst at Morgan Stanley.Andrew Ruben: Today, what happens when the shopping cart starts thinking for itself and maybe even for you?It's Monday, August 17th at 10am in New York.As we think about trends that are driving e-commerce, which remains a share gainer within the overall retail landscape, it seems that there's a transformation that's quickly building around agentic e-commerce.So, Nathan, I think it's timely for us to talk today as agentic seems like it could be the next catalyzer of growth and innovation within the e-commerce landscape.Nathan Feather: How much bigger do we think agentic commerce could make the global e-commerce market?Andrew Ruben: Global e-commerce as we see it is a nearly [$]5 trillion market today. That implies 22 percent of retail sales. The way we see over the next five years is a $7 trillion opportunity, with growth accelerating to a 9 percent compounded rate, up from about 7 percent over the past four years. And this is partly on the tailwinds from agentic.What we see here is this broad arc of reducing friction with e-commerce over time.Think about how easy it is now to pick up your phone, search for some inventory, click, and the goods can be here within one, two days, if not same day. That's reduction of friction that we think physical retail can't match, and the improvements of agentic commerce. Having this agent that can help you search, help you discover – that should further the e-commerce opportunity.We think agentic alone could add about 6 percent to the five-year e-commerce addressable market, with about 20 percent of industry volumes having some material agent influence.So, within this opportunity, Nathan, agentic isn't one size. How should investors distinguish between AI influence shopping and fully autonomous purchasing?Nathan Feather: To your point, there's a wide different flavors that we're calling agentic commerce. And it starts really at the top of the funnel with, you know, you could go to your chatbot of choice and say, ‘I want a hiking backpack with a water bottle slot and a place to hold my keys,' right? ‘Show me the best options in a certain price range.'And there you're capturing the top of the funnel, but as you click in, you may bounce out to a retailer and purchase on there. Or it could go even further, and maybe you complete your entire checkout within that specific chatbot.Now, right now what we're seeing is about half of consumers are starting the top of the funnel at least sometimes with a chatbot, but a very small portion are actually completing purchases. And so, as time evolves, we expect that funnel to widen and start to see a little bit more of this fully autonomous purchasing; although for the most part, we think it's really going to remain top of funnel and mid-funnel.Now, adoption does look very different across regions, partially because of different consumer behaviors. Why has AI shopping gained more traction in some markets than in others?Andrew Ruben: I think that's right, and what we see is so far to date, agentic shopping has been led by the U.S. and China. These are the two largest e-commerce markets globally, also among the highest penetration. Some data to support it: We have proprietary Morgan Stanley AlphaWise survey that show about 30 percent of China consumers shopping using AI tools over the past month. And that compares to about 12 percent in Brazil.Now, we do see some barriers in terms of the pace of companies' innovation, but I think this is more a matter of time. The example you give of that shopping journey, that does seem like it should be applicable globally.There is also a second barrier, and that would be trust. We do see that consumers are using AI search, using AI discovery, and as they get more comfortable with agentic, we think the use cases can increase over time. But as we see consumers today, they're comfortable with search, but not many are willing to let AI do the full end-to-end checkout.Ultimately, as we see it, the companies will drive the innovation, but it's consumers who determine uptake.And that raises the question of who owns the customer journey. Do retailers keep control, or do the general AI agents take the lead?Nathan Feather: To be frank, this is one of the major unanswered questions within this market. And, you know, we can speculate, but we're not going to know for a few years. So, let's go through the potential paths here.I think the first goes within the customer journey. Where does the customer want to check out? Who has the best experience as you go through that journey? And early on, it's retailers. They have your purchase history. They have your payment information. They have your shipping.To your point, they're trusted. You know if you're going to shop at one of these large retailers, you're going to get what you want. And if you don't, you're going to be able to get that refunded.And so, we think at least early on, retailers will likely keep control of that purchase journey and actually be able to innovate a lot on site. Launch on-site agents that are able to get you to the inventory they have even faster.But retailers could gain control over time. They can shop across multiple websites. They can price match. And so, it is going to be a question over time which of these ends up taking the lead. And the economics will change as a result of that.And Andrew, what determines whether agentic commerce ends up generating purchases that wouldn't have happened otherwise rather than simply shifting existing sales to a new channel?Andrew Ruben: It's a good point on the economics because let's say an agentic transaction happens on a company's site. You do still have costs, and that relates to the large language model. The conversation query going back and forth, that's going to be more expensive than a traditional keyword search.So, here's where incrementality comes in. If you're a consumer that's having this transaction on the site, we think that gives better targeting, better information, and should ultimately put the product in front of you that you want to buy. And what this translates to is incremental sales, a sale that wouldn't have happened if you only had traditional search or an experience that you couldn't match in the physical channel.So, we do think that if the sale is incremental and those model costs eventually come down, then that's the setup for an agentic sale to be profitable. I'd also mention the advertising business. It's important for e-commerce having suppliers that will pay to be one of the product listings up front.Our view is that if you're searching better, then you should get better discovery, and the value of that top real estate should hold. That should be more important for the supplier with better targeting, and they can pay up for that.But there is the risk on the other side. How real do you think the risk is that external agents divert traffic and advertising dollars away from e-commerce platforms?Nathan Feather: Well, the risk is real, and it's really dependent on the customer journey. You know, if you go to a chatbot today, you're expecting when you type in your query, you're going to get the most accurate result that they can offer. The issue with advertising is people are paying for that top slot. It's not inherently maybe the best product. It's the person who wanted to pay the most to get that top slot.When you go to, you know, a search website, it's not necessarily the expectation, right? You know that the first few results are going to be paid, and then there's going to be organic after that. And so, from a customer side of things, there's going to be a question of whether there's the permission to see advertising within that flow.If there's not, you could see advertising dollars get diverted, and that is a risk. If you look at large e-commerce retailers, especially marketplaces today, a majority or sometimes all of their profits actually come from the on-site advertising that exists. And so, it's something worth watching. Although we note early on, this ended up being less of a risk than people initially expected.Now, zooming out here, we've covered a lot of ground. So, as we think about it broadly, what are the likely factors that separate the winners here? In other words, what are the capabilities that matter most as we move into an agentic world?Andrew Ruben: Right. And to get to those capabilities, I think agentic commerce is going to improve e-commerce as a digital service. But this still surrounds the movement, the sourcing, the pricing of physical goods.So, I believe that the rules of retail and e-commerce should still hold. That's the fundamentals of do you have the broad selection, the right inventory at the right location that can get to the right consumer? Second, the ability and willingness to innovate. That's companies that have their own agents, that have partnerships, that are developing these tools we think will be better positioned.And then third, thinking about some complementary assets. If you're a marketplace platform with logistics, with loyalty, with financial services, this should support the positioning depending on how the customer journey evolves. Each of these factors we think will matter in an agentic world.And then finally, what evidence should investors watch to see whether agentic commerce has moved from experimentation to a durable growth driver?Nathan Feather: There's a couple of different factors we're looking for here, and it's important to note we're looking for leading indicators. Given agentic is still a relatively small portion of purchases, we're trying to find those things that could identify where you're going to hit inflection points. So, a few things I'd call out.The first are company disclosures. What are the actual retailers in this industry saying about experimentation? And are the products that they're testing actually moved into production?Second, looking at consumer surveys and whether people are starting to use these AI tools more at the top of the funnel, we think will filter down more to the bottom of the funnel over time as additional things are launched.And last, how is your own search behavior changing? Are you starting to see you gravitate more towards an AI chatbot as you're going through your shopping journey? Oftentimes, you'll start to see the behavior start to shift, and then the dollars flow over time.Andrew Ruben: That's it. The shopping cart may become smarter and ultimately grow faster. But for investors, the defining question remains the same: Who owns the customer journey? Nathan, thanks for speaking with me today.Nathan Feather: Great to be here with you, Andrew.Andrew Ruben: 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

The retailer Morgan Stanley says could go from laggard to leader in the second half. After the 2020 clamp down, can China woo tech investors back? Plus, the bullish set-up for Bitcoin.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Listen and subscribe to Money Making Conversations on iHeartRadio, Apple Podcasts, Spotify, www.moneymakingconversations.com/subscribe/ or wherever you listen to podcasts. New Money Making Conversations episodes drop daily. I want to alert you, so you don’t miss out on expert analysis and insider perspectives from my guests who provide tips that can help you uplift the community, improve your financial planning, motivation, or advice on how to be a successful entrepreneur. Keep winning! Two-time Emmy and three-time NAACP Image Award-winning television Executive Producer Rushion McDonald interviewed Sonia Balfour-Fears.

Listen and subscribe to Money Making Conversations on iHeartRadio, Apple Podcasts, Spotify, www.moneymakingconversations.com/subscribe/ or wherever you listen to podcasts. New Money Making Conversations episodes drop daily. I want to alert you, so you don’t miss out on expert analysis and insider perspectives from my guests who provide tips that can help you uplift the community, improve your financial planning, motivation, or advice on how to be a successful entrepreneur. Keep winning! Two-time Emmy and three-time NAACP Image Award-winning television Executive Producer Rushion McDonald interviewed Sonia Balfour-Fears.

On ecosystem restoration; building coherent, sustainable supply chains into the garments we wear; creating resilience in our systems, our bodies, our hearts. 0:00 - Introduction to Vanessa Barboni Hallik and Another Tomorrow 2:49 - Exploring Another Tomorrow's Sustainability Practices 4:11 - Building Relationships and Technology in Fashion 13:20 - The Role of Education and Personal Journey 16:29 - Innovative Materials and Design 23:14 - The Power of Curiosity and Consumer Agency 32:30 - Personal Reflections and Future Directions Vanessa Barboni Hallik is the founder, co-CEO and Executive Chair of Another Tomorrow, a B Corp Certified end-to-end sustainable luxury brand with a mission to model a regenerative and resilient model for fashion, including a digitized blockchain-based product infrastructure delivering transparency, authenticated re-commerce, and additional digital to physical engagement. She is an active speaker on innovation, digitalization, regenerative supply chains, and new business models and has been featured in The New York Times, Fast Company, Bloomberg, Forbes, Vogue, Harper's Bazaar, Cultured Magazine, and Vogue Business for her work among others, and is one of Wallpaper* Magazine's USA400, the Inc Magazine 500, and Worth Magazine's Worthy100. Prior to founding Another Tomorrow, Vanessa was a Managing Director at Morgan Stanley, where she held several leadership roles in the emerging markets institutional securities business. Throughout her career she has worked across global markets and managed culturally diverse and cross-border teams. While at Morgan Stanley, she served as a Trustee on the Board of the Morgan Stanley Foundation and represented the firm at the Council on Foreign Relations. She likewise chaired the Fixed Income Philanthropy Committee, during which she initiated and subsequently led the firm's mentoring program with East Side Community High School, in partnership with PENCIL.org.

Our Global Head of Fixed Income Research Andrew Sheets examines why investors might be overlooking the stability and performance of UK assets, despite persistent negative sentiment.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley. Today, why the UK may need better PR. It's Friday, August 14th at 2pm in London. The last decade has been rough for the United Kingdom. Brexit was a true economic earthquake, and the subsequent weakening of economic ties to mainland Europe, the UK's largest trading partner, made economic activity weaker and more complicated.Then COVID hit the economy hard. So did spiking energy prices when Russia invaded Ukraine. Political volatility has been high, with seven prime ministers in the last 10 years. And at present, UK growth is weak, inflation is too high, and debt to GDP is rising. Moreover, in a post-COVID world that's increasingly driven by the profit and power of technology, including AI, the UK market seems almost stuck in another era. Of the 10 largest companies in the U.S. stock market, eight are in technology. In the UK, none of the 20 largest companies are in tech. Safe to say, being downbeat on the prospects for the UK is one of the most consensus views that I encounter. But it can also be deceiving. Simple stories in the market rarely are.Let's start with the argument that UK markets are boring, stagnant, and being left behind by their lack of technology. It's just not true. Through early August, the S&P 500 has returned 85 percent over the prior five years. The UK market? It's returned 82 percent. And over the last twelve months, the performance of the UK and U.S. markets are also similar. In short, don't judge a book by its cover. The UK's currency, meanwhile, shows no sign of global investors shunning the island. Over the last 10 years, the UK pound has actually gained value against the U.S. dollar. Notable given how strong the performance of the U.S. economy and markets have been over that time. And that's also pretty impressive relative to its peers. Over this same timeframe, the value of the Japanese yen, the Brazilian real, the Indian rupee, and the Korean won have all fallen significantly. The UK's currency, on a relative basis, has outperformed.Now, the UK's growth is weak. Morgan Stanley forecasts growth of just 1 percent this year versus a bit over 2 percent for the United States. But it's notable just what sort of headwind the country has been dealing with. The UK household and corporate sectors are both increasing their savings rates and doing so at the same time; and more savings means less spending and economic activity. To put some context around this, U.S. households are currently saving only about 3 percent of their disposable income. In the UK, it's over 9 percent. And so, if that UK savings rate can just simply stop moving higher – or even fall – well, it would represent a big support to growth going forward. But aren't we avoiding the big question, the fiscal question? After all, we at Morgan Stanley forecast that general UK government debt to GDP will be about 96 percent this year, some of the highest levels since World War II. But this is a global market, and I do think that the relative picture matters. So, when thinking about the UK's 96 percent debt to GDP ratio, let's consider what the numbers are elsewhere. That ratio is 120 percent in China. It's 120 percent in France. It's 125 percent in the U.S. It's 138 percent in Italy, and it's 208 percent in Japan. And out of all of these countries, the UK is the only one where we think the government deficit is materially smaller in 2027 than it was in 2025. Also, year-to-date, 10-year bond yields in the UK have risen less than yields in the U.S. or Japan.A new UK Prime Minister does raise the potential for new policy, something investors will need to watch closely. The country remains sensitive to swings in global energy prices. Yet we think the underlying story is more nuanced and positive than often gets discussed. Market performance has been bearing this out, and in many cases, the bar is low. Thank you, as always, for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today.

Mike Wilson, Morgan Stanley chief US equity strategist and CIO, talks about using gold as a defensive asset to protect your portfolio. He says gold has been in a bull market for 25 years. He speaks with Bloomberg's Tom Keene and Scarlet Fu on "Bloomberg Money"See omnystudio.com/listener for privacy information.

LISTEN and SUBSCRIBE on:Apple Podcasts: https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608 Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i WATCH and SUBSCRIBE on:https://www.youtube.com/@WatchdogOnWallstreet/featured  Chris revisits a 2005 column examining how major Wall Street firms used massive advertising budgets and contractual clauses to avoid unfavorable news coverage. He argues that the financial ties between advertisers and media outlets can influence editorial decisions, raising broader questions about the independence of financial journalism and television news.

Robotaxis are accelerating along the road to commercial viability. Auto and Shared Mobility Analysts Andrew Percoco and Tim Hsiao discuss what this rapid development means for global investors.Read more insights from Morgan Stanley.----- Transcript -----Andrew Percoco: Welcome to Thoughts on the Market. I'm Andrew Percoco, Head of North America Auto and Shared Mobility Research. Tim Hsiao: And I'm Tim Hsiao, Greater China Auto and Shared Mobility Analyst.Andrew Percoco: Today, why robotaxis may be approaching a commercial inflection point. It's Thursday, August 13th at 8am in New York.Tim Hsiao: And 8 pm in Hong Kong.Andrew Percoco: So Tim, for years, robotaxis were really confined to limited pilot rollouts across the globe. You've done a lot of work over the last few weeks. We put out a big collaborative report on the robotaxi market and how it could be a $1 trillion TAM by 2040.What makes this moment different than some of the other robotaxi hype cycles that we've seen in the past? Tim Hsiao: We observe four things have been converging. Firstly, end-to-end AI is improving much faster. Secondly, hardware and the training costs are falling. And thirdly, more well-capitalized players can fund deployment. And last but not least, regulation is becoming clearer.The leading operators are no longer just demonstrating the technology. They are running fully driverless services around the clock and generating commercial rides. So in our view, the questions has been shifting from can it work to who can expand operating areas, raise utilization and lower costs at a much faster pace.So that's a very different setup versus the 2018 and 2021 hype cycles. Andrew, U.S. autonomous miles could rise from 116 million in [20]25 to 16 billion by 2032. But still make up only about 0.5 percent of all miles driven. How can robotaxis become a meaningful business while remaining such a small part of the market?Andrew Percoco: I would say, you know, obviously the U.S. mobility and transportation market is a massive market. So even with the rapid growth that we expect in robotaxis, it's going to take a long time to make a material impact in the overall market share of mobility. But if you think about the profit pools in this business, 16 billion miles at $2 a mile can, you know, pretty quickly become a very significant TAM and market opportunity.And I think, you know, fundamentally, if you think about a robotaxi business, I would argue you're better utilizing an asset... Or if you think about the, you know, car park, the amount of vehicles that are, you know, in the fleet today or in the U.S. today, they're sitting idle 90 percent of the time, right?So you're talking about taking a smaller amount of volume and driving a higher utilization on that fleet and driving much improved economics. So yes, it's going to take time to displace the, you know, hundreds of millions of cars that you have on the road in the U.S. and displace the penetration of miles driven. But ultimately, you know, we think that the profit pool and the opportunity in robotaxis are much more attractive for the entire value chain, as it relates to robotaxis. And I'd say there's a few things that we're watching along the way to make sure that, to your point, you know, this is not another hype cycle. And that there's real commercial backbone to this business.I'd say the first is seeing the rollouts continue to improve, and the density of the rollouts improve across the select cities that we've seen in the U.S. right now. Robotaxis are only available in a handful of cities in the U.S., so we want to see that continue to expand into more cities. But also the density of the fleet increase in the cities where they're currently present.And at the same time the safety side is still something that gets a lot of questions in making sure that it is truly safer than a human driver, across technology platforms, right? There's various players in this market with different approaches to technology. So, I think seeing that the safety curve is starting to or continues to improve is going to be very important for the viability of this market going forward.Obviously U.S. is very different from China. What have you seen in China? China has shown some impressive growth and utilization in some of the operators that are on the road in China. So just curious as to your perspective in terms of what you're seeing on the ground there. Tim Hsiao: I think China shows that there's much in operations and skill challenges as technology challenges. The fleet in China is above 5,000 vehicles across I think more than 7500 square kilometers in key cities. And some operators average more than 20 orders per vehicle per day.So, total cost of ownership has fallen roughly 30 to 40 percent, while remote assistance ratios are moving from like one operator for like 20 to 40, even like 50 to 60 vehicles. And we think it will achieve like one for a 100. So that has produced real break-even happens, especially in some major cities like Guangzhou, Shenzhen, Wuhan – the tier one, tier two cities.So in our view, I think in China, wider operating domains, fleet density and utilization rate, as you just mentioned, reinforce one another. So make it some more like the real commercial case. Instead of just, like trials as we saw a couple years ago. If more value shifts towards the software, fleet operation, and the data, as well as the customer relations, how does that change the profit pool, across the auto industry, especially in the U.S.?Andrew Percoco: First off, I think the auto industry in general is becoming, you know, more software focused and aware. You know, it's being led by the robotaxi market where the autonomous driving software and technology is obviously the most important part about getting this technology to market.That is ultimately trickling down to personally owned cars where you're seeing more autonomous technology being deployed. Auto OEMs are able to charge subscription revenue for this software. So it expands, I'd say, the value proposition of buying a vehicle expands the profit pool for the OEMs.It changes in some ways the cyclicality, or can change the cyclicality of the industry if you've got more kind of recurring revenues, subscription like business model versus just a hardware focused OEM model, which has been kind of the predominant focus for the OEMs historically. I'd say the other angle, interesting angle here is, you know, as this business scales, there's gonna be a lot of vehicles on the road. There's gonna be a lot of fleets of vehicles on the road. Those need to be managed by somebody or some company, right? So if you think about, you know, the rental car industry, right? These companies have been in the business of managing fleets and renting out fleets for a very long time. They know how to do that very, very well.I think there's an interesting opportunity for that part of the value chain, to participate in aiding these robotaxi fleet operators, in scaling and bringing their business to market. Charging, maintenance, reconditioning, all the things that take a lot of time and a pretty large amount of physical infrastructure.That's an opportunity for the rental car industry to come in and leverage their existing know-how to help. And, you know, I think Tim, an important part of this commercialization process is driving down the cost structure of robotaxis. They are very sensor; heavy sensor heavy. They're very compute heavy. I think China is the clear leader on cost and supply chain. I think in China you're seeing robotaxis, you know, around $35,000 to $40,000, which is considerably lower than what we see in the U.S. today.So, how do you think that that will accelerate adoption in China, but I'd say more importantly overseas as some of these robotaxis businesses look to expand outside of China. Tim Hsiao: In our view, it could be a major accelerant because as we noticed that the depreciation is still one of the largest fixed costs for robotaxi. So, as we just mentioned, I think, $35000 to $45000 US dollars, the purpose-built robotaxi can lower the breakeven utilization threshold. And make it easier to finance fleets and open cities that could not support the $150,000 US dollar vehicle.And not only in China, because globally, I think the Chinese cost deflation can be paired with the local ride-hailing platforms in the overseas market that provide demand and regulatory access. But as we highlighted in our previous, the global reports once again, we don't think the cheap vehicle is sufficiently by their self.So in our views, on top of the competitive cost structure, registration, data localization, insurance, and local operating costs can still delay the margin curve, particularly in Europe, which we think there are still quite a lot of uncertainties. So Andrew, as we just, as we just discussed, the lower vehicle costs help, but the operating model still has to work, right? So with operating costs expected to fall and the margin potentially moving above 30 percent or even higher at scale, what are the key assumptions investors should focus on?Andrew Percoco: There's a handful of key assumptions you need to sensitize to get to that 30 percent or more margin structure in this business. I'd say the first is going to be utilization, right? You need to be running these assets at a high utilization to essentially amortize those fixed costs over a larger number of miles driven.Number two, insurance today is probably one of the largest buckets of cost when we think about this business. Insurance is, from our perspective, a big unlock for this industry as the safety, as we mentioned before, the safety data continues to improve. We think that will be a reason to, to expect that the insurance costs associated with autonomous driving technology and robotaxis will continue to decline.It's about 30 cents per mile on our estimate, so it's very significant in terms of the overall cost structure of robotaxis. Drivers or where there's the most sensitivity around the model. Obviously, there's charging costs, there's maintenance costs. Those are, I think, fairly known at this point. But the utilization and insurance, I think, are the two biggest drivers of really getting that margin profile to improve over time. Tim, I guess when you think about the next, call it 10 to 15 years, I think we will put out a trillion dollar market by 2040 from a TAM perspective.What do you think the biggest markets are that investors should be watching, in terms of getting us to that trillion dollar TAM? Obviously, U.S. and China are kinda leading now, but what are the next markets people should be watching?Tim Hsiao: In addition to the major market, as you just mentioned, the U.S. and China, in our views, I think we also need to focus on markets like Europe, the Middle East and Southeast Asia. I think their scale is underappreciated, as we highlighted in our previous report. Because if you think about that, Europe, the Middle East, and Southeast Asia in aggregate have roughly four million taxis together ride-hailing vehicles.So even with 25 percent conversion, they imply that about one million is the L4s vehicles. The Middle East offers supportive regulators, you can tell, simpler operating environments and higher fares. And if you think about the Southeast Asia, the ASEAN, I think the market has dense demand and strong local platforms.And of course, Euro markets definitely can't be ignored because Euro will move more slowly, because we think the regulations and the data rules would initially add cost. But the truth is, if you think about the European market, I think the taxis or ride-hailing fares are among the highest globally, even compared to the U.S. and rest of the world.So in our view, the material margin could be more attractive. And this market, on top of the U.S. and China, in our view, can support several regional winners. So, not only limited to a very, you know, the single one or two markets.Andrew Percoco: Yeah, it's great Tim. It sounds like, you know, the robotaxi race, if you want to put it that way, will be won by those who can really bring together technology, and a compelling cost structure while also following the proper regulations and making sure the safety is improving at a rate that's acceptable to regulators.So, Tim, thanks for taking the time to talk today. 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.

A.M. Edition for Aug. 12. Centrist David Crowley scores an electoral upset in Wisconsin, narrowly defeating Democratic socialist Francesca Hong in a race to secure the Democratic nomination for governor. WSJ's Damian Paletta says Crowley's victory could mark a turning point for progressives. Plus, New York City launches a sweeping investigation into four prediction markets – probing Polymarket, Kalshi, Coinbase and Gemini Titan for alleged deceptive marketing practices and the targeting of minors. And could one of Hollywood's oldest studios be relocating from Tinseltown to Music City? Luke Vargas hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The potential path to a durable U.S.–Iran agreement has twists and obstacles ahead. Our Head of U.S. Public Policy Research Ariana Salvatore discusses current negotiations and the impact of recent developments for investors.Disclaimer: Important note regarding economic sanctions. This report references jurisdictions which may be the subject of economic sanctions. Readers are solely responsible for ensuring that their investment activities are carried out in compliance with applicable laws.Read more insights from Morgan Stanley.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of US Public Policy Research at Morgan Stanley. Today, the latest on U.S.-Iran tensions, talks, and the path to a deal. It's Wednesday Aug 12th, at 2 p.m. in New York.The diplomatic picture in the Middle East has shifted yet again. Last week, there was growing optimism that the U.S., Iran and Oman could reach an arrangement to improve commercial passage through the Strait of Hormuz. But the two sides have since hardened their positions.  This week, we've seen some bouts of escalation, and headlines have been mixed over the past few days.At the same time, the energy security picture remains complicated. The U.S. administration says the seven-day average of oil leaving Hormuz has risen to almost 9 million barrels per day. But traffic remains well below normal conditions, and the risks we think are no longer limited to the Strait. We're beginning to see potential for disruption across multiple regional chokepoints and alternate shipping routes. That brings us back to the framework negotiated nearly two months ago. The U.S. and Iran signed a Memorandum of Understanding in mid-June. It was intended to create a 60-day window for negotiating a more durable agreement. That framework addressed commercial passage through Hormuz, the U.S. naval blockade, sanctions relief and frozen funds – as well as longer-term negotiations over Iran's nuclear program. But the implementation has proven much harder than agreeing on the framework itself.So where are negotiations getting stuck? First, there's the Strait itself. Iran has tied a full reopening of the Strait to a broader package that includes an end to the U.S. blockade, sanctions relief and compensation. Washington, in turn, is trying to preserve economic leverage and appears unwilling to provide those concessions upfront. Second, sanctions sequencing: The U.S. wants relief tied to clear signs of progress, while Iran is seeking confidence that any relief is durable and not easily reversed. And third, there's the nuclear question: enrichment levels, Iran's existing stockpile, and a longer-term verification framework. These are still to be negotiated. That's likely to take longer than the 60-day time period. So, what's the right framing here for investors? We think it's not necessarily a deal or no deal binary. It's more so a series of partial agreements, implementation tests, setbacks, and renewed negotiations. After the June deal was signed, we flagged several live paths to re-escalation: execution risk around sanctions and Strait control, a potential divergence between the U.S. and Israeli objectives, domestic political pressure in Washington, and the basic challenge of resolving core nuclear questions within such a short time frame. We think those risks are now becoming more visible, but we think both sides have strong incentives to avoid a return to a full conflict, like the type of engagement we saw back in March of this year.Moving forward, the signposts we laid out in June—maritime normalization, access for the International Atomic Energy Agency, sanctions implementation, military restraint, and rhetoric—all remain the right trackers to watch. But expect the bargaining process itself to be noisy, unstable, and non-linear. Rather than a clean transition from conflict to ceasefire to final deal, the more likely path will have fits and starts. So what should investors do with that information? On oil, our commodity strategists remain constructive on prices, given the ongoing supply uncertainty and the emergence of new chokepoints across the region. Altogether, they see those constraints keeping the market relatively tight compared to the levels we briefly saw in June when the MOU was signed. If there's another sharp rise in oil prices, our U.S. equity strategists think that could be a key risk to the near term outlook. Our U.S. economists agree, but also think the Fed would need a bigger shock than markets previously expected to resume hiking. As a result, we expect the Fed to stay on hold this year. 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.

Plus: Foxconn to ramp up global AI server production. And Tencent Holdings' AI spending ends its earnings growth streak. Julie Chang hosts. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In this episode, Matty A. and Ryan Breedwell analyze the most significant economic events shaping the market, from the possibility of an Iran peace deal to corporate America's record-breaking S&P 500 earnings beat. They examine the persistent housing affordability crisis, exploring how 30-year mortgage rates and changing generational habits are impacting homeownership.The discussion dives deep into the latest tech and private equity movements, including Morgan Stanley's $600 price target for SpaceX and Berkshire Hathaway's massive pivot into Google and home builders. With inflation data looming and job numbers facing continuous downward revisions, this episode provides critical insights for navigating today's complex investing environment.KEY TOPICS DISCUSSEDIran conflict peace negotiations and potential stock market reactionsCPI and PPI inflation data expectations and Federal Reserve rate policiesSpaceX market valuation and Morgan Stanley's $600 bull case price targetCoreWeave earnings reports and upcoming technical resistance levelsCorporate America's unprecedented 29.2% aggregate S&P 500 earnings beatUS housing affordability crisis and increasing 30-year fixed mortgage ratesBerkshire Hathaway deploying cash into Alphabet and Taylor Morrison HomePrivate equity firms holding 33,575 unsold businesses amid high borrowing costsKEY TAKEAWAYSHistorically high S&P 500 earnings beats indicate corporate margins are much stronger than Wall Street analysts anticipated.Continuous downward revisions in the US jobs report suggest ongoing economic cooling, which may take future Federal Reserve rate hikes off the table.High interest rates remain the crucial linchpin suppressing housing supply and affordability, leaving Gen Z increasingly sidelined from the American dream.Berkshire Hathaway's recent $6.8 billion investment in a home builder signals institutional confidence in the long-term necessity of new housing construction.Massive private equity portfolios backed by private credit are facing severe liquidity challenges as borrowing costs remain elevated.CONNECT & TAKE ACTIONImagos Income Fund: Text "INCOME" or "DEALS" to 844-447-1555 to learn more about Matty A's private debt fund targeting 10% fixed returns paid out monthly.Visit skylineocresidences.com to discover luxury condo ownership at Skyline OC, Orange County's tallest residential tower. Get a free financial audit on your investment portfolio by texting X-Ray to 844-447-1555

Our CIO and Chief U.S. Equity Strategist Mike Wilson discusses a new market cycle, in which investors are demanding more than just growth from companies.Read more insights from Morgan Stanley.----- Transcript -----Mike Wilson: 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 look at an important shift in what the market wants to see from companies going forward. It's Tuesday, August 11th at 11:30 am in New York. So, let's get after it.This week I am going back to our broadening thesis – but with a slightly different twist. Earlier in the year, broadening was about beta. It was about the market moving beyond a narrow set of mega-cap winners and rewarding economically sensitive areas as the rolling recovery took hold. In the last few episodes I've talked about how that phase is now over. And we're moving from an early-cycle broadening into a mid-cycle quality rotation. In short, the market is no longer demanding just growth – but growth with durable earnings, strong margins, and free cash flow. To be clear, the broadening in earnings is still very much alive. Russell 3000 median stock earnings growth is running at 15 percent, the strongest since 2021; while median sales growth is at 8 percent, the best since 2023. At the same time, 87 percent of S&P 500 companies are beating earnings expectations this quarter, and earnings revisions breadth has rebounded to 23 percent, with 76 percent of industry groups showing positive revisions breadth. However, headline earnings are no longer enough for stock outperformance. The market is saying, ‘Show me the money'— and that's exactly what should happen in a mid-cycle transition. When companies raise both earnings and free cash flow estimates, they are rewarded. When they only raise earnings and not free cash flow, the market is much less forgiving. Investors are no longer paying indiscriminately for growth. They want cash conversion. This is also why I think AI adoption remains such an important theme. The market is increasingly rewarding companies that can demonstrate real efficiency gains from AI, not just talk about the open-ended opportunity in abstract terms. That is a very different phase for the AI cycle. The first phase was about building the infrastructure. The next phase is about who uses it well. Companies that can translate AI adoption into better margins, better productivity, and better free cash flow should continue to be rewarded. In other words, AI is becoming less about the promise and more about the evidence.That framework tells us where to be positioned. I continue to favor quality and AI adopters. Within Financials, I prefer large-cap Financial Services, particularly Insurance and Capital Markets exposed businesses, where earnings revisions are inflecting and our regime analysis remains supportive. Within cyclicals, I like Discretionary Goods, where the wallet-share shift from services to goods, improved pricing, and better earnings revisions all point to catch-up potential. In Tech, I continue to prefer hyperscalers over semis. Semis can still participate tactically, especially after recent momentum unwinds, but the hyperscalers offer a better multi-month risk-reward. They have resilient core businesses, attractive relative valuation, and underappreciated optionality around AI-related ROI and adoption. Just as important, they are not only enablers of AI, but they are early adopters. They have the flexibility to spend less if the market becomes more demanding about capex discipline. In terms of remaining market risks for this year, I'm still watching interest rates and oil very closely. A gradual rise in nominal yields alongside strong economic and earnings data is not necessarily bearish. In fact, historically, that has been one of the better environments for equities because it brings back my ‘run it hot' theme. Stronger nominal growth supports revenues and earnings. The problem is not the level of rates. It is the pace of change. If back-end yields rise too quickly, the cost of capital becomes a headwind for stock valuations.Bottom line, the broadening is still happening, but the market is raising the bar. Early-cycle beta is giving way to mid-cycle quality. Earnings are broadening, but free cash flow is also necessary to be fully rewarded. AI is still an important market driver, but the market wants measurable benefits and the leadership is becoming more selective within sectors rather than across them. This shift may make the market feel less euphoric in the short term, but also healthier and more sustainable in my view. This is not a market that is simply chasing momentum any more. It is starting to separate the companies that can simply talk about growth from the companies that can convert it into durable free cash flow and longer-term value.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!

MRKT Matrix - Tuesday, August 11th S&P 500 falls amid Iran uncertainty, Big Tech losses (CNBC) An inflation report Wednesday should be a big deal for the Fed. Here's what to expect (CNBC) Santoli: Stocks return to winning ways. Why the market gods may not be satisfied with July's brief pain (CNBC) One big question remains for the bull market, says Bank of America (CNBC) Investors poured $2.3 billion into this riskier corner of the bond market in July (CNBC) Nvidia is trying to quiet ‘circular financing' accusations. Wall Street is unsure it will (CNBC) AI computing power is becoming a tradable asset class as CME launches futures contracts (CNBC) SpaceX shares can more than double, Morgan Stanley says. The bull thesis isn't based on space business (CNBC) --- Subscribe to our newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://riskreversal.substack.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ MRKT Matrix by RiskReversal Media is a daily AI powered podcast bringing you the top stories moving financial markets Story curation by RiskReversal, scripts by Perplexity Pro, voice by ElevenLabs

Our U.S. Consumer Finance Analyst Jay Bacow and our Co-Head of Securitized Product Research Jay Bacow explain why AI can transform the way Americans shop for, manage and refinance their mortgages.Read more insights from Morgan Stanley.----- Transcript -----Jeff Adelson: Welcome to Thoughts on the Market. I'm Jeff Adelson, Morgan Stanley's U.S. Consumer Finance Analyst.Jay Bacow: And I'm Jay Bacow, Co-Head of Securitized Products Research, also working at Morgan Stanley.Jeff Adelson: Today, how AI could change the way Americans shop for, manage, and refinance their mortgages.It's Monday, August 10th at 10am in New York. The U.S. mortgage market is worth more than $14 trillion, and its performance ultimately depends on the choices millions of homeowners make. Today, refinancing still means shopping around, comparing offers, and working through a lot of paperwork. AI could make that process much easier, especially when rates begin to fall.Jay, you led this work on our AI mortgage blue paper. What's the main way AI could change the mortgage market, and why does the borrower matter so much?Jay Bacow: So we think the biggest change would be borrower adoption of using AI agents to manage their personal finance. An agent on your phone could just monitor mortgage rates, compare lenders, reduce the paperwork, and make homeowners more likely to refinance when the economics work.Let's think about what that could be. Historically, only about 30 percent of borrowers that had the ability to lower their mortgage rate by a 100 basis points did so in a given year. When a borrower went to get a mortgage quote, less than half of them asked more than one lender for a quote.That agent could go reach out to 30 lenders, ask for a variety of different mortgages, could upload all the documents, could do this all effectively instantaneously, present the homeowner with the best option. Allow the homeowner to effectively click a button and refinance. I think this could be pretty transformative for the mortgage market.Jeff Adelson: Now, as we think about this transformation, Jay, mortgage investors still rely heavily on past refinancing behavior trends. If AI makes borrowers more likely to refi[nance] when rates fall, how could that change the way these investors value mortgage-backed securities?Jay Bacow: Well, we all know that past performance is not indicative of future performance, and those models are likely to understate future prepayments. If you get a faster response, it's going to make mortgages more negatively convex.That's going to make the durations shorten. It's likely to widen mortgage spreads by about 10 basis points in our base case. And now, if that base case were to happen and we get, let's call it 100 basis point rally in the future, we think that that could cause something like a 40 percent pickup in refinance volumes versus our current expectations of what refinance volumes would look like in that 100 basis point rally.Jeff, you cover a lot of the largest mortgage lenders. What does this mean for their business model?Jeff Adelson: So, it's pretty straightforward. More borrowers refinancing means more loans for the industry to originate. Today, we're still sitting below what I would describe as normalized levels of originations. We're sitting at about $2 trillion of mortgage originations per year. As we think about normalized, we think that's somewhere in the order [of] around $2.5 trillion. So just that $600 billion alone could get us straight there. We tend to think about this more in our bull case, where we could see something in the order of $3 trillion of originations or more, still below what we saw during the peak COVID years of about $4 trillion or more. But still pretty meaningful and material for the industry.Now, for the scaled lenders, that can create meaningful operating leverage. Mortgage companies have historically had to hire aggressively when volumes rise, and then they've had to reduce headcount when the cycle turns. AI could allow them to process more loans with the same employee base, making their cost structures more flexible and reducing the need to rebuild capacity during every single refi[nance] wave.But the earnings benefit we don't think will necessarily match the dollar benefit from volumes. If AI makes it easier for borrowers to compare offers and allows every lender to process more loans, then competition could intensify and pressure gain on sale margins. So the opportunity is a larger market and better productivity.The key question for individual lenders is: how much of that volume can they capture without giving too much back through pricing? Now, as we think about automation, Jay, it could bring in more loans, but could also intensify competition and reduce the profit lenders can earn when they originate and sell a mortgage. So, how should investors in your space weigh those two effects? Jay Bacow: So, the mortgage investors are short the option to the mortgage homeowner of when they can refinance.And if the mortgage homeowner is going to be more efficient about refinancing, the mortgage investor is going to need to get paid more for that. They're going to demand wider spreads, and they're particularly going to demand wider spreads where that option that they're shorting is worth more. That's generally how it's going to play out, but there's also other aspects as well.That duration shortening, because the borrower's more likely to refinance, means that the investors that own that duration will need to buy some more duration against that. You're also going to see more demand for duration as rates rally. So it's going to be a bid for the low strike receivers, as our options experts will pay close attention to.And then if we get a further rally, you also get a more of an impact across the consumer writ large. You can imagine a world where mortgage rates are substantially lower than they are right now. An agent could sit there and say, "Why don't you consolidate your debt between your credit card, your auto loan payments, maybe your student loan payments and your mortgage?" Allowing consumers to save more and then maybe spend that in the economy.Jeff Adelson: If we maybe take it a step beyond refinancing, how could AI affect home sales, homeownership, and access to home equity?Jay Bacow: So let's just go back to thinking about this agent that's on your phone that's looking at all the opportunities.Traditionally, right now, most people are only calling up one lender, they're getting one quote. If your agent is looking at lots of different lenders and lots of different options, you're probably going to get more ability to take out a mortgage. So you're going to get an expansion of the homeownership rate.That's going to create more demand for housing. As rates rally, you're going to get home sale activity picks up more than it used to, and people are also going to be more able to take advantage of the equity they have in their house. So, you're going to get more usage of second liens and HELOCs and cash-out refinance activity.Once again, we think this is mostly going to happen three to five years down the road, but we're not really sure exactly how this is going to play out. So Jeff, what would be some of the signs that people could look at to see if it's playing out in the three to five-year timeline that we're expecting – or slower, maybe even faster?Jeff Adelson: Sure. So yeah, I mean, I think it's going to be similar to what we've already observed as consumers ourselves and what we're seeing with all the LLMs and AI tools we're adopting today. You should see some rapid advances in the ease of use and the adoption of these technologies from a forward-facing, client-facing perspective. What we all see in the websites, what we all see in the apps.It should become easier for us to engage with the mortgage process, compare rates to actually step into the process. Whereas today, you still need to maybe speak with a bank officer, a loan officer, or a mortgage broker to get deeper into the process and actually better understand what your rate means today.So that would be the first step. The second step would be closing speeds. The average originator today still takes about 40 to 45 days to close a mortgage. The biggest and largest originators that have invested the most in technology and AI today are closing at about, call it, 12 to 20 days. So, half the industry level. So, that should come down over time and make it much easier to actually apply and finish a mortgage.And then quite frankly, the most obvious answer would just be at the given level of rates that are outstanding today, we should see a step up in the level of refi[nance] volumes. That would be the most obvious one. But that'll be the outcome of everything else we've talked about rather than the actual cause.Jay Bacow: That makes sense. So faster refinancing, it's likely to make the mortgage market more responsive when rates fall and effects that are going to reach well beyond the borrower. Jeff Adelson: That could mean higher volumes for lenders, quicker prepayments for investors, and wider swings across housing and rates markets.Jay Bacow: Jeff, thanks for taking the time to talk.Jeff Adelson: Great speaking with you, Jay.Jay Bacow: And thank you all 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.

What comes after you build and sell the company that has defined your entire adult life?Alex Lieberman co-founded Morning Brew as a college student after noticing that traditional business news felt dense, dry, and disconnected from the way young professionals wanted to consume information. What began as a Microsoft Word document emailed to a small group of students grew into one of the world's most recognizable business media brands and ultimately led to a reported $75 million deal.But the exit was not the end of Alex's entrepreneurial journey. It became the beginning of a deeper conversation about identity, leadership, purpose, and what success is actually supposed to feel like.Alex is now on his new entrepreneurial journey building Tenex, an AI transformation consulting firm. In this episode of From Start-Up to Grown-Up, executive coach and bestselling author Alisa Cohn sits down with Alex to unpack the decisions behind Morning Brew's growth. Alex shares why he walked away from his dream job at Morgan Stanley, how he found a co-founder whose strengths complemented his own, and what he learned when the business needed him to evolve from a builder into an operational CEO.This is an honest, thoughtful conversation about building something remarkable while remembering that your company is something you do, not the entirety of who you are.You'll learn:How Alex Lieberman transformed a college newsletter into Morning BrewWhy early reader behavior revealed that the idea had real potentialWhy regret minimization helped him make a life-changing decisionWhat happened behind the scenes during Morning Brew's acquisitionWhy the $75 million exit felt different from what Alex expectedHow OCD and panic attacks affected Alex's experience as a founderWhy founders can struggle with identity after an exit or leadership transitionHow to build a “purpose portfolio” beyond your professional titleHow to choose an executive coach for your current challengesWhy reflection is an essential part of growing from founder to leaderWe talk about:00:00 Meet Morning Brew co-founder Alex Lieberman01:08 How a college newsletter became Morning Brew04:16 Finding a co-founder with complementary strengths08:19 Leaving Morgan Stanley to build Morning Brew full time10:31 Using worst-case scenarios and regret to make difficult decisions19:18 Navigating Morning Brew's acquisition during the pandemic23:25 Why the $75 million exit felt surprisingly underwhelming28:32 Realizing he was a builder CEO, not an operational CEO31:34 Leading a growing company while managing OCD and panic attacks36:01 Losing his identity after transitioning out of the CEO role40:00 Rebuilding through reflection, experimentation, and connection50:19 Why every founder needs a diversified “purpose portfolio”57:27 Making mistakes as a strategy for entrepreneurial growth01:00:45 What Alex wishes he had understood earlierFollow Alex onInstagram: https://www.instagram.com/alexlieb LinkedIn: https://www.linkedin.com/in/alex-lieberman/ Website: https://alexlieberman.com/ Connect with Alisa!Follow Alisa Cohn on Instagram: @alisacohnTwitter: @alisacohnFacebook: facebook.com/alisa.cohnLinkedIn: https://www.linkedin.com/in/alisacohn/Website: http://www.alisacohn.comDownload her 5 scripts for delicate conversations (and 1 to make your life better) Grab a copy of From Start-Up to Grown-Up by Alisa Cohn from Amazon

"The demand is there" for AI, says Sam Vadas when discussing TSMC's (TSM) monthly revenue. Figures for the Taiwanese chip manufacturer continue to rise even as the reaction in the stock appears muted. Sam turns to analyst updates through Morgan Stanley's upgrade for HPE (HPE) and Well Fargo's upgrade for Dick's Sporting Goods (DKS). ======== 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

Apple (AAPL) sold off Monday after getting a downgrade from Jefferies. TSMC (TSM) revenues climbed nearly 45% since one year prior. NetApp (NTAP) tapped a new all-time high after Morgan Stanley upgraded the stock. Marley Kayden discusses the session's top stories.======== 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

Jim Caron, CIO of portfolio solutions for Morgan Stanley Investment Management, says a hot CPI report on Wednesday could cause problems for the Federal Reserve. Caron says higher nominal growth is driving equity prices higher. He speaks with Bloomberg's Tom Keene and Paul Sweeney. See omnystudio.com/listener for privacy information.

Fixed income experts from Morgan Stanley and Janus Henderson discuss where to find yield. And Jack zeroes in on a no-calorie soda success. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our Head of U.S. Public Policy Research Ariana Salvatore explains how U.S.-China tensions, export controls and domestic regulation are reshaping where AI is built, who controls it and what investors should watch.Read more insights from Morgan Stanley.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of U.S. Public Policy Research at Morgan Stanley. Today, a look at how government is increasingly determining the future of AI in the U.S. – from where it's built to which technologies US companies and consumers can use. It's Friday, August 7th at 10am in New York. AI is rapidly reshaping the economy and society, so this is a pivotal moment for government to consider the rules governing that development. The first area to watch is technology restrictions, particularly in the context of U.S.-China competition. Now, for much of the past decade, the government's approach has been to restrict a relatively narrow group of technologies with clear national security implications while maintaining broader commercial ties. But as export controls spread across more sectors of the economy and AI moves from software into physical infrastructure, the definition of what qualifies as national security has become broader. The Department of Commerce could, for example, expand the entity list. That would require US cloud providers, software companies, and model marketplaces to remove or stop supporting models tied to designated Chinese developers. Congress could then make those restrictions more durable through things like the annual defense bill or other policy vehicles. We're keeping an eye on several legislative proposals, like the AI Overwatch Act, which would tighten controls and give congressional oversight around exports of the most advanced AI chips; and the MATCH Act, which would extend restrictions further upstream to semiconductor manufacturing equipment and seek closer alignment with allied producers. These measures wouldn't directly ban Americans from using a Chinese model, but they could constrain China's ability to train future frontier systems. But it's not just the US that could impose a set of restrictions. China has a parallel set of tools focused more on integration and market access. Regulators could block four models or APIs. They could require locally controlled deployment. They could impose Chinese data and content standards or use cybersecurity and entity list authorities to promote domestic substitutes. The likely result is an increasingly distinct pair of AI ecosystems. That's our two worlds thesis in practice. Over time, we think that means a bifurcated global AI market into separate technology ecosystems. That looks like the U.S. relying on export controls, allied supply chains, and largely closed frontier model platforms, while China emphasizes domestic hardware, open-weight models, subsidized compute, and localization. Over time, that bifurcation could produce different chips, models, standards, data rules, and distribution channels, while third countries navigate between the competing stacks. The second area to watch is domestic regulation. Today, the landscape is pretty fragmented. States are moving first on certain specific issues, including automated decision-making and child safety. Now, at the same time, Congress is confronting competing objectives from industry, consumer groups, and national security officials. So far, we think the evidence suggests that the administration's preference is for a light-touch approach, a largely voluntary national framework rather than a broad new licensing regime. But it's also moving toward more direct oversight of the most advanced models. That includes the possibility to play a more active role prior to model release to ensure that certain protections like cybersecurity and intellectual property are met. Publicly outlined priorities from industry seem to broadly overlap with that approach: a consistent federal framework, clearer liability standards, access to data, compute, and power, and copyright rules that don't materially limit model training. But of course, the industry isn't monolithic. There are some important nuances between frontier developers and other players. So, what does all this mean for investors? The government's reaction function will be critical to the way AI is developed and diffused throughout our society in two key ways. First, we see regulation altering not only the pace, but also the geography of AI infrastructure. At the same time, we think these constraints could strengthen the investment case for bottleneck solutions like on-site power generation, fuel cells, storage, and more. Second, greater technology bifurcation supports investment in parallel supply chains. The key takeaway here is that the government is no longer simply regulating the industry from the sidelines. It's helping to determine how fast AI develops through domestic rules, where it develops through infrastructure, permitting, and sovereign AI policy, and which technologies are accessible through export controls and market access restrictions. 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.

This episode is sponsored by Fidelity Investments and the all-new Fidelity Trader+ platform.Try Fidelity's most powerful trading experience yet: https://www.fidelity.com/trading/trading-platforms?immid=100734&imm_pid=428905629&imm_aid=a&dfid=&buf=99999999 Views, opinions, products, services, and strategies discussed are notendorsed or promoted by Fidelity Investments. Fidelity BrokerageServices LLC, Member NYSE, SIPCApex Fintech Solutions provides the tools and services that enable hundreds of clients to launch, scale, and support digital investing for tens of millions of end investors. The company provides essential infrastructure and a comprehensive ecosystem of cloud-based products to enable and streamline trading, wealth management, cost basis, tax reporting, and, through its subsidiary Apex Clearing™, custody and clearing. LEARN MORE: https://apexfintechsolutions.com/?utm_source=Risk+Reversal&utm_medium=Podcast&utm_campaign=701PJ00000fnXhaYAE Mike Wilson, Chief Equity Strategist and CIO at Morgan Stanley, joins Dan Nathan and Guy Adami for his 15th appearance on the pod. Mike breaks down why he thinks the S&P 500 is headed to 8000, why he's calling for 10-year yields to hit 5%, and why the market has quietly rotated from low-quality "enablers" like semis into higher-quality names like the hyperscalers. The conversation digs into the AI capex debate (Nvidia, Meta, Microsoft, Micron), what a new Fed chair means for rate policy, the risk of retesting the recent lows, and how China's rare earth dominance factors into the AI arms race. They also go long-horizon — space economy, humanoid robots, and drone warfare — before closing with a walk down memory lane through the dot-com bubble. —FOLLOW USYouTube: @RiskReversalMediaInstagram: @riskreversalmediaTwitter: @RiskReversalLinkedIn: RiskReversal Media The financial opinions expressed in Risk Reversal content are for information purposes only. The opinions expressed by the hosts and participants are not an attempt to influence specific trading behavior, investments, or strategies. Past performance does not necessarily predict future outcomes. No specific results or profits are assured when relying on Risk Reversal. Before making any investment or trade, evaluate its suitability for your circumstances and consider consulting your own financial or investment advisor. The financial products discussed in Risk Reversal carry a high level of risk and may not be appropriate for many investors. If you have uncertainties, it's advisable to seek professional advice. Remember that trading involves a risk to your capital, so only invest money that you can afford to lose. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This communication is not a recommendation or offer to buy, sell or retain any specific investment or service.

America's biggest banks are opening more local branches. Our Head of U.S. Large Cap and Mid Cap Banks Research Manan Gosalia looks at the merits of physical locations.Read more insights from Morgan Stanley.----- Transcript -----Manan Gosalia: Welcome to Thoughts on the Market. I'm Manan Gosalia, Morgan Stanley's Head of US Large Cap and Mid Cap Banks Research. Today: why the bank branch you pass on your commute may matter more than you think. It's Thursday, August 6th at 10am in New York. When was the last time you went to your bank? You probably do most of your daily banking online and maybe go to the local branch for occasional transactions, like getting a certified check or talking to a financial advisor. So, you might think that bank branches are fading into the background. But America's biggest banks are actually accelerating their investments in physical locations. That shift could reshape the competition for your deposits. In our research, we looked at where 12 large U.S. banks are expanding their footprints, and we identified 57 target markets. 34 of those markets are being pursued by multiple banks, and nine of those markets are being pursued by five or more banks.Since mid 2025, about 80 percent of these banks' new branches have opened in those markets. Most of the expansion is happening in the Southeast and Texas, with additional activity in the Midwest and several major metropolitan areas. 95 percent of the target markets have either above median projected population growth or they have ranked in the top 10 percent for deposit growth. That helps explain why Nashville and Atlanta are each targeted by seven of the banks, while Miami, Dallas, and Denver are targeted by six. These are places where households and businesses are growing and where banks see an opportunity to build relationships that could last for decades. The central question is whether physical branches still attract deposits. The evidence suggests that they do. From 2022 to 2025, 90 percent of the time when a large bank increased their branch share in the market, their deposit share also increased. But to become a real contender, a few scattered branches are not enough. Banks generally need at least a mid-single-digit share of local branches to compete effectively. At 10 percent or more branch share, deposit share exceeds branch share by a median 3.5 percentage points. So, density, not just presence, is what matters. Most large banks that we looked at have not reached that level. 60 percent of their positions in expansion markets remain below 5 percent market share. And so, this build-out looks like the beginning of a long competitive cycle. Even then, the pressure is already visible in what banks are paying for deposits now. The highest offered retail certificate of deposit rates are higher in the South compared to the Northeast. Higher rates do make deposits more expensive for banks to fund. In fact, evidence from the recent earnings reports suggest that this may already be happening. And we expect higher funding and branch costs to pressure bank margins and lift expenses into 2027. This means the cost of gathering core deposits could move structurally higher. And the lesson is surprisingly old school. You can do almost everything on an app, but a branch on the corner still carries weight. 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.

From short-term interest rates to long-term bond yields, the Fed's credibility is being tested. Global Head of Fixed Income Research Andrew Sheets discussed inflation, Federal Reserve Chair Kevin Warsh's outlook, and the options ahead.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley. Today: Can the Fed hold the line? It's Wednesday, August 5th at 2pm in London. The Federal Reserve has a difficult job. The U.S. economy is a complex and varied ecosystem that covers everything from brain surgery to your burger order. The Fed is asked to keep prices stable and people employed using, for the most part, just one simple tool. A short-term interest rate, and without any control over what government policy or global events might bring. Currently, the Fed probably feels pretty good about its success with one half of this – in the job market, given that the unemployment rate is near historical lows. But it probably feels less successful about price stability. Over the last five years, overall prices in the U.S. economy have risen over 20 percent based on the Fed's preferred inflation measure. That's roughly double the increase that a goal of 2 percent annual inflation would otherwise bring. Into this complexity steps a new Fed chair, Kevin Warsh. He has emphasized two changes for his tenure. First, that inflation is too high and needs to come down. And second, that the Fed has historically communicated too much with the market, which Chair Warshkeep thinks has helped contribute to investors potentially taking too much risk while also restricting the Fed's options to act. What markets are now processing is a potential tension between these two goals. After all, high inflation is an immediate issue. In a world where the Fed is hoping to keep price increases at about 2 percent per year, their preferred measure, PCE inflation, is rising more than 3 percent on an annualized basis over the last three, six, and 12 months. In the latest ISM Manufacturing Survey, [the] measure of price increases among manufacturers is well above normal. In the face of that, one option for the Fed to combat this inflation would have been to raise interest rates. It didn't do that. Another would be to suggest that it was very close to taking action and likely to move soon. It didn't do that either. Indeed, our economists think that the market took Chair Warsh's lack of guidance and action at the most recent Fed's meeting to suggest a pretty high bar for rate hikes; and even the potential to redefine the Fed's 2 percent inflation target in favor of something more general and unspecified. The result was a market reaction that would suggest less focus on inflation. The prospects for rate hikes were reduced, the yield curve steepened, led by a sell-off of long-end yields, measures of expected inflation rose, and the U.S. dollar weakened. In the days since, markets have settled a bit. But the result is going to be a market that is now going to be much more sensitive to incoming inflation data. If that inflation data moderates in the second half of this year, as we at Morgan Stanley expect, then the Fed's approach could look justified – as the data suggests that neither action nor more communication about what they're going to do is necessary. But if inflation doesn't cooperate, the challenge becomes immediate. Christopher Waller, another member of the Fed, recently said that "Sternly staring at inflation until it melts before our withering gaze is not an option." The market will expect action and expect a framework explaining that action. Until that point, our rate strategists think that yield curves will continue to steepen. Thank you, as always, for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen, and also tell a friend or colleague about us today.

Plus: A federal judge sets a start date for the antitrust trial over Paramount's $81 billion takeover of Warner Bros. Discovery. And the robotaxi competition heats up in London, as both Wayve and Uber win approval to offer supervised rides. Luke Vargas hosts. Sign up for WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Head of US Public Policy Strategy Ariana Salvatore and US Thematic Strategist Michelle Weaver, alongside Senior Economist and Strategist in Morgan Stanley's Private Wealth Management Sarah Wolfe, examine the economics of the AI datacentre boom, the pushback and the policy implications.Read more insights from Morgan Stanley.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of Public Policy Research at Morgan Stanley. Michelle Weaver: I'm Michelle Weaver, U.S. Thematic and Equity Strategist. Sarah Wolfe: And I'm Sarah Wolfe, Senior Economist and Strategist with Morgan Stanley Wealth Management. Ariana Salvatore: Today: the politics, economics, and market implications of America's AI data center build-out. It's Tuesday, August 4th at 10am in New York. AI infrastructure spending is becoming a major force in the U.S. investment cycle. But as you've heard on this podcast in recent weeks, local resistance to data centers is growing, and projects worth hundreds of billions of dollars are being canceled or delayed. More than 300 local moratoria have passed since 2023, and restrictions now touch 40 states. Now, most are temporary pauses, not outright bans, but the community opposition is tangible. For investors, the key question is how these local pressures shape the broader build-out. So, I wanted to talk to you both because, Sarah, you've looked at this on the local level, and Michelle, you've been leading some of our thematic work on this topic. So, Sarah, maybe we'll start with what happens when a data center comes to town. How does a large project ripple through a local economy, especially when so much of the expensive hardware is imported? Sarah Wolfe: I think we need to look at the data center build-out from two lenses. First, at the national level, and then what's really happening at the local level, county by county. So, at the national level, the headline investment can actually overstate the contribution to GDP because a lot of the components that go into data centers – think chips, servers, networking equipment – most of that is imported. So, it's actually an offset in the GDP accounting.But when we analyze the AI build-out at a local level, we see that the town experiences the project very differently. A data center still needs a physical shell, concrete, steel, electricians, construction workers, and then the restaurants that feed the construction workers. So, the local multiplier depends on how much of that spending around the data center stays nearby. Workers are going to get paid, local suppliers win contracts, and nearby businesses will see more demand. And then importantly, governments may collect more property and business tax revenue. When we look at county-level research on the AI data center build-out, we do see positive effects on employment, business formation, wages, income, and tax returns. So, these data centers are significant. They do have significant multipliers. But we need to dig a little bit deeper and look at how it affects different counties. Ariana Salvatore: So, it sounds like there are some local economic benefits. How durable do you think those are? Sarah Wolfe: Some of the effects are durable and some aren't. The largest and most important effects come through employment in the near term. If we look at the construction phase of these projects, let's look at a data center that's 250,000 square foot, in Virginia. That supports more than 1,500 workers during construction. But then, if we look at what happens after construction is done, there's only about 50 full-time workers once it's operating. And I will say I think that's a high-end estimate. If you look at how many workers these data centers employ state by state, some numbers are 10, some numbers are 20, and some are 30 employees. So, 50 is maybe on the higher end. So, the bottom line is that the labor market multiplier actually fades after the facility comes online. What does persist, are the smaller share of data center processing jobs, ongoing supplier and service activity, and then importantly, of course, the property tax base. But even that fiscal benefit depends on how the incentive package is designed. If a locality, for example, grants a very large, long-lived sales or property tax exemption, it may give away much of the revenue that made the project attractive in the first place. So, the job story is real, but it's much more front-loaded. And then the tax revenue story is real too, but it really matters on how the locality negotiated the incentive package. Ariana Salvatore: So, it sounds like there are some benefits and some potential drawbacks. How do you think communities should judge whether a trade-off like that is worth it? Sarah Wolfe: I think communities should be asking this question of how much spending and tax revenue actually stays local after all the incentives? How many jobs remain after construction? Who pays for new generation transmission, water system, and roads? And who bears the spillovers through utility bills, housing costs, or land use? The evidence does suggest that data center growth can lift incomes and expand the tax base. But it also raises home prices. And as we know, it raises electricity prices as well. A typical AI data center may use as much electricity as 100,000 homes, so cost allocation is critical. The strongest agreements make benefits durable and costs explicit through transparent reporting, sunset dates or claw backs on incentives, infrastructure cost-sharing, and protections that keep the household from subsidizing this build-out. The test is really whether the community captures enough lasting value to justify the demands on land, power, water, housing, and public finances. Ariana Salvatore: Michelle, I want to bring you in here. The local picture that Sarah describes helped explain why the politics can be so uneven. How are moratoria and other local restrictions changing the pace and the location of the build-out, maybe on a national scale? Michelle Weaver: I think you have to think about just the different type of moratoria themselves even. So, we're not seeing them uniform across different states in what's been proposed.However, the majority of moratoria are a pause, not a[n] outright ban on construction. So, they might say, "Okay, we want one year," or "We want three years to do local impact studies and, and think about the way these data centers are going to impact communities." So, the primary risk is really to the pace of the build-out, and as more and more of these moratoria pop up, you have to start to think about how that could shift the geography and the location of where these data centers will ultimately be built. We are seeing a shift towards more data centers being placed in rural locations. This also has implications for the international data center build-out. You're seeing more and more of these data centers go up in Canada and in Australia to serve U.S. needs. Ariana Salvatore: The polling data show us that voters are increasingly skeptical of AI. Specifically, they're worried about electricity prices and local costs. How should investors read that concern? Michelle Weaver: Well, there's a couple things we have to unpack here. First is really around perception. So, in certain areas where you have both high data center activity as well as unregulated utility markets; yes, it's true, there is some of this raised cost ending up on consumer power bills from data center activity. But in other areas with unregulated utility markets and lower data center activity, you don't see the same link between consumer power bills and what's going on with data center electricity consumption. But perception is what really drives politics and given that this perception is becoming spread across different states with both regulated and unregulated utility markets, politicians are reacting to it. And the second thing this gets at is affordability. Consumers have been stressed by inflation for years now and elevated prices. And given that they think that data center costs are now winding up on their power bills, it's not surprising that you're seeing this big reaction, and that anything having to do with affordability has become a huge issue for voters. Ariana Salvatore: Translating that into how we think things evolve from here, what industry and financing trends do you think matter most going forward? Michelle Weaver: We recently identified the three main bottlenecks for the data center build-out as power, people, and politics. This whole episode has been about that third P, politics, but let's unpack power and people. On power, we still think there's a potential shortfall of around 38 gigawatts needed through 2028. So, power is going to remain a huge bottleneck, and as the politics layer gets placed on top of the power layer, you're seeing more and more of an issue there. And so, what that really argues for is for data centers to be off grid. That way they can say, "Okay, there's no way we can potentially impact consumer power bills if we're not even connected to the grid." The second P, people, is another big bottleneck, and we're seeing a very tough time for data centers to get skilled laborers. It's very hard to find electricians right now and other skilled laborers needed to set up these data centers. Ariana, that brings us to the policy debate. Why is data center opposition moving from town halls into state houses and Congress? And what does this mean for a conditional build-out? Ariana Salvatore: Yes, I think the points that you both touched on really explain why we're seeing this sort of pushback evolve, right?Local communities are concerned about their electricity prices. Again, we see that on more a regional than a national basis. They're concerned about quality-of-life concerns. They're concerned about the environmental impacts. And so, all of that has caused these efforts to sort of cross state lines. We see it in both Democrat-held state legislatures as well as Republican-held. So, it's definitely resonating with voters, and this is an issue that we think is going to be a key wedge issue into the midterm elections. It started to move into Congress rhetorically, but we still think something like a federal ban or a federal moratorium is very unlikely. And that's because we see a different incentive structure for lawmakers in Congress from the state and local level. Principally, I'm talking about the U.S.-China relationship. So, when you look at the geopolitical backdrop to this debate, there are certain things that you can't ignore. And one of those things is that the U.S. and China are locked in this race for AI supremacy at the moment. And I think federal lawmakers have more of an incentive to respond to those policy demands and those policy needs, meaning they want to keep facilitating the build-out.So that's why you're seeing the national level still relatively supportive of this build-out. We're seeing permitting reform. We're seeing Defense Production Act being leveraged by the president. We're seeing still an overall very favorable environment trying to unlock, sort of, that power bottleneck, for example. So that's kind of what brings us to this conditional build-out. Now, what does that mean? We think that the hyperscalers in these companies are going to have to offer some concession to local communities to facilitate the build-out. And that could be a number of things. I think it depends on the state's concern or the local community's concern principally, but we see a few different options. One of those things is behind-the-meter power generation. So on-site power is one of the clear kind of offsets to this debate. Another thing would be improving utilization rates. So, our sustainability analysts found that the capacity utilization rates are actually quite low at some of these data centers in the range of 30 to 40 percent. So maybe that can be increased. We've got some potential new regulations or transparency requirements around water usage. So, the short of it is, there's not going to be a one-size-fits-all solution here. But we think there's enough on the policy side that these companies can do or offer essentially to local communities. So that the entire build-out doesn't get delayed or doesn't get stopped. And, and that's kind of why we still expect elevated AI CapEx, not just this year, but next year as well. We think that the risks are skewed to the upside for those numbers.Sarah Wolfe: Ariana, I want to touch back to the comment you made on low odds of a nationwide ban on AI data center build-out – and tie it to this broader competition between the U.S. and China, with global supremacy in AI. Can you talk a little bit more about how competition with China is going to prevent a nationwide ban and some of the national security concerns around that? Ariana Salvatore: This ties into the theme of sovereign AI, which is something that we've been focused on recently, especially with all these discussions of more tech restrictions and controls between the U.S. and China. And specifically, it's one of the reasons that we think the geographical build-out will be constrained to either just the U.S. domestically or countries that we are closely aligned with. And really the point I want to make here is that there's three geopolitical realities that are going to form, we think, the incentive structure for federal lawmakers and that are slightly different from the things that state and local policymakers tend to focus on. The first is that we're seeing China leverage its supply chain position to pressure the physical inputs required for AI infrastructure, right? So, we're seeing that tit-for-tat escalation in the context of a broader strategic détente, but there's still a competitive aspect there. The second is that we know China's accelerating its own physical AI build-out. Reporting indicates they're spending something like $300 billion over five years on its own domestic network, so very much full steam ahead in terms of its own domestic potential. And the third is that research has identified China-linked influence operations that use an American frontier model to generate social media posts, comments, and political cartoons linking the data center construction to rising energy prices. So, there's still a little bit of uncertainty as to whether or not those campaigns actually influence public opinion at scale. But in our view, it really underscores the linkage between national security and geopolitics and the AI data center build-out. All these developments together we think underscore the physical component of the AI race and make something like a national data center ban or federal legislation toward those ends really difficult to reconcile with the growing bipartisan strategic imperative around AI, which is something that we think persists past the midterms as well. But at the end of the day, the pace of the AI build-out will depend not just on demand, but on how well projects address the concerns of the communities hosting them. That's why we think this conditional build-out is probably the right base case for now. Michelle and Sarah, thanks so much for taking the time to talk. Michelle Weaver: Great speaking with you both. Sarah Wolfe: Thank you, Ariana. Ariana Salvatore: 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.*****Sarah Wolfe is a member of Morgan Stanley's Wealth Management Division and is not a member of Morgan Stanley's Research Department. Unless otherwise indicated, her views are her own and may differ from the views of the Morgan Stanley Research Department and from the views of others within Morgan Stanley.

SpaceX on the move in after-hours trading on the back of its first earnings report since going public. Can investors expect SpaceX to blast off, or will the aerospace giant sink even further below its IPO price?Then, major Pharma earnings from giants like Pfizer and Merck beating Wall Street estimates with Amgen and Eli Lilly on deck. Founder and CEO of Portal Innovations John Flavin lays out the best trades in the Pharma market, and his reaction to Novo Nordisk's slide after disappointing guidance. Plus, why Morgan Stanley is bearish on AMD, digging into Caterpillar earnings, and can McDonald's make a comeback? Fast Money Disclaimer Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our CIO and Chief U.S. Equity Strategist Mike Wilson explains why investors should favor quality as the market moves from early-cycle momentum to more disciplined, mid-cycle leadership.Read more insights from Morgan Stanley.----- Transcript -----Mike Wilson: 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 the ongoing transition in the economic recovery from early to mid-cycle.It's Monday, August 3rd at 11:30 a.m. in New York. So, let's get after it.Following on from my podcasts the past few weeks, I want to reiterate our key call that the economy and the market are moving from early to mid-cycle. That may sound like strategist jargon, but it has very real implications for leadership, positioning, and how one should think about the next phase of this bull market.For much of the past year, the market was rewarding early-cycle characteristics and behavior. Lower-quality, higher beta stocks, and the most explosive earnings revision stories led the way. That made sense. We were coming out of a rolling recession, operating leverage was improving rapidly, and earnings revisions were accelerating off of depressed levels. But as the business cycle matures, the market typically becomes more discerning. It starts to ask a harder question: not just who can grow, but who can sustain that growth with stable earnings, strong margins, and free cash flow generation.In other words, quality starts to matter again.That's exactly where we are now. The rotation towards quality has begun, and I don't view that as a bearish development for the broader market even if it's bad for some of the former leaders. The S&P 500 is a very high-quality, large cap index. So, while the market may continue to consolidate in the near term, the quality rotation should ultimately support index resilience and help the S&P 500 work its way toward our 8000 year-end target.The big market event last week was the capitulation in the historic momentum unwind. Momentum sold off hard, and semiconductors were at the center of it. That shouldn't surprise anyone who has followed our work over the past several months. We've been using the Silver stock analog to think about semis, and remarkably, the semi index bottomed almost exactly where that analog suggested.That argues for a tradable bounce in semiconductors over the next few weeks. However, the more important point is that semis may struggle to reclaim leadership for the rest of the year. Semis are a classic early-cycle group, and this is increasingly becoming a mid-cycle, quality-led market. The Silver stock analog would support the same conclusion.The provocative way to say it is this: the AI cycle is not over, but the easy money in the most crowded AI beneficiaries may be. The AI investment cycle still has plenty of runway, but the market is no longer rewarding capex blindly. It's asking for evidence of return on invested capital, adoption, monetization, and operational discipline. Last week's performance gap between Microsoft and Meta was a perfect example. It wasn't random. It was about capex discipline. The market is rewarding more prudent spending, and that could translate into a real overhang for the capex beneficiaries, in line with my views for the past several months.That is why I still prefer hyperscalers over semis, with one important caveat: dispersion within the hyperscalers is rising. The group has already outperformed semis by 30% over the past four weeks, and I think it can continue over the next several months. Hyperscalers have resilient core businesses, exposure to the AI application layer, and an underappreciated ability to use AI to reduce operating expenses if needed. They're both enablers and adopters. But the market will no longer treat them all the same. The winners will be the companies that can show return on investment, communicate capex discipline, and preserve earnings quality.This is also why AI adoption is becoming so important. The next leg of the story is not just about who builds the infrastructure. It's about who can use it more effectively. Our work shows that companies where AI is material to the investment thesis and pricing power is neutral to strong, are already seeing margin expectations improve. Relative net margins for that group have expanded by 50 basis points in just three months, and they now sit nearly 400 basis points above the broader market. That's not hype. That's operating leverage with a new engine.The Fed is the other major piece of the puzzle. Chair Warsh stayed on hold last week, but he remains tight-lipped about his reaction function. Markets are still adjusting to a Fed that wants to rely less on forward guidance and more on unfiltered market signals. I think that's a healthy development over the longer term, but transitions are rarely smooth. The biggest risk to this consolidation turning into a correction is if the 10-year yields rise above 5%. Such a rise could weigh on equity multiples and force the Fed to either revert to its old ways of guiding the markets or provide more liquidity to calm rate markets.Bottom line, the bull market is not over, but it is changing. As we move from early to mid-cycle in this recovery, the equity market wants higher quality. Semis may bounce, but they are unlikely to be the leader again. Meanwhile, hyperscalers will likely continue to trade better, with the best ones exhibiting more capital discipline. More importantly, AI adoption is moving from promise to measurable margin benefit. This is what mid-cycle looks like: less forgiving, more discerning, but still constructive for investors who follow the rotation rather than fight it.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!

Our Strategist Michelle Weaver talks to Michael Zezas and Jessica Alsford, Co-Directors of the Morgan Stanley Institute, about how AI, energy resilience and industrial policy are changing investment decisions.Read more insights from Morgan Stanley.----- Transcript -----Michelle Weaver: Welcome to Thoughts on the Market. I'm Michelle Weaver, Morgan Stanley's U.S. Thematic and Equity Strategist.Michael Zezas: I'm Michael Zezas, co-director of the Morgan Stanley Institute and Deputy Global Head of Morgan Stanley Research.Jessica Alsford: And I'm Jessica Alsford, Morgan Stanley's Chief Sustainability Officer, and also co-director of the Morgan Stanley Institute.Michelle Weaver: Today: how AI, energy, geopolitics, and industrial investment are competing for scarce resources – and what that competition could mean for markets.It's Friday, July 31st at 10am in New York.Jessica Alsford: And 3 pm in London.Michelle Weaver: Mike and Jess, as co-directors, you speak with people across the firm to identify the biggest questions facing companies and investors, especially the important ones that may not have clear answers yet. And to understand how those questions are shaping client conversations. Mike, what's one of the questions that you think investors are wrestling with the most right now?Michael Zezas: So, one of the biggest questions is how several major investment cycles can happen at the same time. AI, energy infrastructure, manufacturing, and defense may all be competing for the same power, the same skilled labor, equipment, and capital. So, investors need to look beyond each theme in isolation and ask where constraints could delay projects, raise costs, or redirect spending, and which companies are best positioned to manage all of that.Michelle Weaver: Since the institute began, you've examined a number of topics, including AI, energy resilience, and geopolitical fragmentation, just to name a few. Jess, which topic has been the most compelling to you?Jessica Alsford: It's difficult to pick one because, to be honest, for me, it's really the way that AI, energy resilience, and geopolitics have all really become one story. If you think about the energy transition, which has been playing out for a number of years. But now we also have the AI build-out, and that depends on reliable and affordable power. And then geopolitical shocks, which are demonstrating the need for countries to have energy security.So, if you put all of this together and you can really see that there is a huge need to scale the global energy system, but using all types of power available to us, including renewables and nuclear.Michelle Weaver: Mike, how is that intersection that Jess spoke about between AI, energy, and geopolitics altering the way that companies are thinking about investing?Michael Zezas: So, geopolitical shocks, they're more norm than exception now. The situations in Iran, Ukraine, Venezuela, they all reflect an evolving international order where the U.S. is less interested than it used to be in preserving global security and trade standards.And that's a particular problem in a world where companies and governments spent much of the last 50 years optimizing to benefit from globalization. So basically, looking for the lowest cost way to produce things, sourcing materials and labor in the most efficient way possible, presuming that the frictions in international goods and services trade would just keep getting lower.That's obviously not the case now, and whether it's a good idea or not, the trend is toward governments leaning into industrial policy to prioritize supply chain security and protect whatever it sees as their national competitive advantages. And really that's correlated with higher trade barriers. So, that means that while companies are still focused on efficiency, they have to build resilience through more regional supply chains, greater redundancy, and investment in strategically important capacity. So, the practical message from our teams is to map critical dependencies, diversify where possible, and be realistic about the extra cost of resilience rather than assuming the old globalization model will simply return.Michelle Weaver:  One of the clearest constraints on the AI build-out is energy. Our thematic research team is estimating a nearly 40-gigawatt shortfall in power needed for data centers. For context, this is multiple New Yorks worth of power. Jess, how significant of a limiting factor is power becoming?Jessica Alsford: Power is definitely becoming a strategic constraint. If you think about grid connections, these can take years to set up. And so, access to power really is going to determine where facilities are built and how quickly they're able to come online. And it looks like there won't be one universal solution.You've got natural gas, nuclear, renewables, storage, microgrids. They're all going to need to play a role. And for companies, that means that they really are going to have to be planning power alongside the site and financing. For investors, it means focusing on reliability, affordability, and permitting, not just headline demand.Michelle Weaver: So, AI, energy, and geopolitics can no longer be considered in isolation. As countries and companies rethink where they source, build, and invest, where do you see the biggest opportunities emerging?Jessica Alsford: The opportunity is likely to be broader than any single sector, to be honest. and the institute has shown that capital really needs to be flowing towards more resilient supply chains as well as new productive capacity and also the infrastructure that supports both of these. And this covers power, grids, automation, logistics, as well as data. I'd also say that location matters, too. And companies need to be able to weigh political stability as well as skilled labor, reliable energy, and policy support. And investors should be looking for markets and businesses that can turn those advantages into durable returns.Michelle Weaver: The institute has also looked at founders as a source of economic information. Jess, what can their decisions reveal before those changes appear in traditional economic data?Jessica Alsford: So, founders are often making decisions at the leading edge of growth and capital formation, and so their behavior can provide an early read on both at-risk appetite and also financing conditions. If we take the current macro environment as an example of this, the institute has shown that many founders are adapting rather than simply waiting, and this means extending fundraising timelines, spawning investor conversations, and considering private credit, structured equity or tender offers. For companies, the takeaway really is to preserve financing flexibility. And for investors, it's to watch how those choices can reshape private market liquidity.Michelle Weaver: Mike, to bring this back to where we started, if power, labor, and capital are all becoming more constrained, what should investors be watching most closely?Michael Zezas: Yeah. I'd watch whether capital spending plans are being delayed or resized or redirected in some way, and I think importantly, what the reasons would be for any of those things happening.Is there a constraint around power or labor or equipment permitting or financing? Those details help distinguish whether you'd be looking at temporary setbacks or a structural shift. So, something that would signal that we've built too much capacity in AI or manufacturing relative to demand. And that's the type of thing that would be a real headwind to the economic outlook and potentially create problems in the credit markets.But to be clear, we don't see demand flagging anytime soon. And so, for investors, it's less about whether to be bullish or bearish on the outlook for the markets and the economy, and it's more about looking for companies that are durable beneficiaries of these trends. So those are ones with secure inputs, flexible balance sheets, and realistic return thresholds.Michelle Weaver:  Absolutely. As Mike said, we don't see demand slowing, and we're seeing a lot of encouraging data points around AI adoption. One analysis we did recently shows that around 25 percent of S&P companies are now quantifying the benefits they're seeing from AI adoption. And this diffusion story is only going to continue to grow.Mike, Jess, thanks for joining me.Michael Zezas: Thanks Michelle.Jessica Alsford: It's great speaking with you both.Michelle Weaver: And to our listeners, thanks for tuning in. If this is all piquing your interest, you can find the institute's articles, roundtables, and future work on Morgan Stanley's website. And as always, if you enjoy Thoughts on the Market, please leave us a review and share the podcast with a friend or colleague.

Our Global Head of Thematic and Sustainability Research Stephen Byrd explains why the recent AI infrastructure selloff may reflect technical pressures, not weakening fundamentals.Read more insights from Morgan Stanley.----- Transcript -----Stephen Byrd: Welcome to Thoughts on the Market. I'm Stephen Byrd, Morgan Stanley's Global Head of Thematic and Sustainability Research.Today: Are investors misreading the AI infrastructure selloff?It's Thursday, July 30th, at 10am in New York.The recent selloff in AI infrastructure stocks has raised a familiar question: Is the buildout running ahead of real demand? The market is pulling back and we think that reflects profit-taking, crowded positioning, and forced selling by investors. This is not about weaker fundamentals. But the selloff has brought to light three key concerns, which we think the market is overplaying.The first concern is how much enterprises are willing to pay for AI. The median enterprise employee currently generates less than $11 a month in token spending. That's the fee paid when an AI model processes a request and generates a response.We think there is room for that to increase. From the employer's perspective the economics are compelling. Across workplace applications, the cost to execute the economic task would be $2-$5. And that could save an enterprise $55. That to us suggests companies are likely to spend more, not less, on AI over time.The second debate centers on efficient models, including competitive models developed in China.  And here, policy responses both from the U.S. and China can have an impact as well. Some investors worry that better efficiency means less computing demand. But we see the opposite risk. This is a classic example of Jevons paradox: When something becomes cheaper or more efficient to use, people use more of it. In AI, lower costs can attract more users, encourage more frequent use, and make complicated applications more economical. The scale is striking. Industry leaders estimate that compute demand could double every six months, which would amount to more than a thousand-fold increase in compute over five years. Hyperscalers could quadruple available power capacity to roughly 120 gigawatts by 2028, from about 30 gigawatts in 2025.And that leads to the third debate – whether data centers can secure enough power to keep expanding. It's a valid concern. In the U.S., facilities under construction and contracted grid capacity cover about 30 gigawatts. That's less than half the 68 gigawatts of power that data centers are likely to need from 2026 through 2028. Grid connections can take five to seven years in some regions. Skilled electricians, welders, and pipefitters are in short supply. And local opposition is increasing as communities debate electricity bills, tax incentives, and who should pay for grid upgrades.These are real obstacles, but we view them as delays rather than dead ends. Onsite generation, fuel cells, energy storage, natural gas turbines, and the conversion of existing high-power sites could close the gap, at least partially.We believe much of the recent weakness in AI infrastructure has been driven by technical factors rather than a change in the underlying fundamentals. As AI becomes more capable and cheaper to use, demand for intelligence, compute, and power is likely to keep rising. The global market is fragmented as policy decisions in the U.S. and China shape how growth unfolds. But strong economics should support continued investment.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.

Plus: Amazon reports higher revenue in the second quarter from its cloud-computing business. And a data-center developer working with Anthropic plans to borrow $15 billion for a new Texas campus, with backing from Google. Julie Chang hosts. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.