Markets: The disconnect between the economy and financial markets – Morgan Stanley


The apparent disconnect between what the economy is doing and what financial markets are doing might not be as unusual as it initially appears, per Morgan Stanley.

Key quotes

“We see April's moves consistent with past periods where markets led the economy and cared more about the coming change to economic growth than the level of that growth. For markets to hold these gains, keeping that change positive is essential.” 

“We think the biggest risk is not that the recovery is slow, but rather a scenario where growth weakens again, perhaps later this year, which would mean that the positive rate of economic change is no longer in place.” 

“Perhaps somewhat counterintuitively, we think a slower, more cautious reopening for the economy could actually be better for markets than a faster and more rapid one.”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD refreshes intraday low near 0.7750 ahead of Aussie Retail Sales, Trade Balance

AUD/USD extends the previous day’s losses from weekly top. RBA failed to entertain markets but Treasury yields stole the show. Risk-off heavies the quote ahead of final readings of key data.

AUD/USD News

EUR/USD retreats to stabilize around 1.2060

The EUR/USD pair advanced to 1.2112 but retreated amid the renewed dollar’s demand on resurgent government bond yields. Attention now shifts to US employment-related data.

EUR/USD News

Gold bears eye sub-$1,700 area amid strong yields, US dollar

Gold remains pressured near nine-month low, fades bounce off $1,702. Bond bears return amid optimism concerning US stimulus and vaccine power, comments from ECB add to the Treasury yield rally. American covid aid package, Fed’s Powell eyed amid a light calendar in Asia.

Gold News

Dogecoin price on the brink of a 40% explosion towards $0.07

Dogecoin price has been trading sideways for the past two days and inside a downtrend since its new all-time high of $0.087 on February 7. Now, the favorite canine-cryptocurrency is ready for a new leg up.

Read more

DXY continues to gain on Wednesday, eyes 91.60

US dollar firm and approaching Feb 4th highs from a significant technical support structure. US economy moderately gathering pace according to the Fed's Beige Book.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures