economy
Morgan Stanley flips stance on Europe as continent counts cost of Iran war
The Iran war has left Europe facing a "stiffer headwind", forcing Morgan Stanley Investment Management to retilt its exposure.
TL;DR
- Morgan Stanley is rotating from overweight to underweight Europe.
- Higher energy costs due to the Iran conflict are expected to dent European growth.
- The firm is rebalancing portfolios to be overweight the U.S.
- Fiscal stimulus in Europe may be rerouted to cushion energy price impacts instead of boosting growth.
- Oil prices have fallen but are not expected to return to previous lows, impacting Europe more significantly.
- Morgan Stanley is mildly overweight and considering increasing exposure to Japan, potentially funding it from Europe.
- Japanese industrials are also a sector of interest.