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  • Why the UK May Be Poised for a Surprising Rebound
    Despite news that the UK economy is set to slow due to uncertainty around US trade policy, our analysts Andrew Sheets and Bruna Skarica explain why they have a more optimistic outlook.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Head of Corporate Credit Research at Morgan Stanley.Bruna Skarica: And I'm Bruna Skarica, Chief UK Economist at Morgan Stanley.Andrew Sheets: Today we're going to talk about the United Kingdom and why, despite a downbeat outlook by many in the market, we remain more optimistic.It's Friday, May 2nd at 2pm in London.Bruna, it's great to talk to you again about the UK and not just because this is an unusual day in London where it's sunny and warm, and at the moment warmer than Los Angeles. You know, when discussing the UK, I do think you kind of need to take a step back. This is a country and an economy that's had a tough number of years where growth has been sub-trend, inflation's been higher, and a lot of assets have traded at a discount.So maybe just to give some context, talk to us a little bit about the last couple of years in the UK and the challenges the economy has faced.Bruna Skarica: Indeed, Andrew, I do think it's important to take a step back to appreciate just the amount of supply side shocks the UK has seen in recent years. First, between 2016 and 2020, of course, the country had to navigate Brexit negotiations. The elevated uncertainty kept a lid on business CapEx. In 2020, of course, as the rest of the world, we saw the lockdown and the pandemic. What followed were supply chain disruptions, and then, the European energy shock in 2022. I do want to zoom in on this final point because in its scale, the natural gas price surge in the UK was twice more of a hit to growth compared to the 1970s oil price shock.We've also seen a fair share of volatile market moves, most notably around the mini budget in the autumn of 2022. On top of all of this, the Bank of England into these supply side shocks had to hike interest rates to cap the inflation surge. And they went to above 5 per cent and have recently been relatively slower in reducing policy restrictiveness than most of its peers.So, when you tally all these factors up, it's really no surprise that the UK has seen an exceptionally weak post COVID recovery.Andrew Sheets: And that's continued right into this year. You know, I remember a lot of conversations with global investors heading into 2025, and again, the sentiment around the UK was kind of downbeat. Growth was pretty soft. Inflation was still high. Because inflation was high, interest rates here were still quite high. And so, you really had this, you know, unattractive mix of weak growth, high inflation, tight monetary policy. And then you could throw onto that, this uncertainty around the U.S. and trade. And you had a Trump administration that was adopting a more adversarial policy towards trade and towards Europe, which the UK was getting caught up in.So, you know – again, did I miss any of the challenges that the UK was facing, entering this year?Bruna Skarica: No, I think that's a great summary. First, at the end of last year, of course, the government faced some pretty tough decisions in the October budget, and they hiked a tax – a payroll tax really – in order to balance the books, which created somewhat subdued sentiment around the labor market this year.Now the labor market has been soft in the UK at the start of this year, but it did hold up a little bit better perhaps than the expectations from the end of last year. At the start of the year, we also saw the energy inflation forecast rise. So, that led to a more cautious tone by the Bank of England in February and March, as you mentioned. And now on the trade front, although we have a small manufacturing sector, we are a small open economy, we're a big beta to global growth dynamics.I would just like to mention here that one of the real bright spots of the UK economy in recent years have been services exports to the U.S., the kind of high-value-added white-collar services exports, which rose between 2019 and 2023 by 50 per cent. Now with the growth in the U.S. slowing and obviously the Euro area as well, UK growth will be affected too this year. We actually took our growth forecast down by around 30 basis points in our latest GDP revisions.Andrew Sheets: But Bruna, we're here to talk about the future and you know, I do think it's fair to say that going forward we think this picture is starting to look better. So, let's jump right into that. Across a number of specific points. Why do we think the UK story could look better as you look ahead?Bruna Skarica: Absolutely. I mean, the last point that I mentioned, I do think I want to put it in context. The trade related revisions in the UK are still less than what our colleagues in the euro area and the U.S. had undertaken in recent months on the back of the U.S. trade policy shifts. So, the UK does look a little bit like a relative winner there.Second, we now think that inflation can come down faster than both the Bank of England and the market expected at the beginning of the year. Commodities prices will do a fair bit of heavy lifting this year, but we do think that next year in particular, domestically generated inflation could slow fairly sharply as wage growth sticks around 3 to 3.5 per cent, which we think is fairly inflation target consistent.This all means the Bank of England should be able to cut more than the markets expect. We anticipate 125 basis point worth of cuts between May and November, and we think the terminal rate could fall to as low as 2 ¾. So, we think the neutral rate in the UK is between 2.5 to 3.5 per cent, and we do think the market still has a bit of adjustment to do in the sense of the pricing of the terminal rate one and two years ahead.The third point around fiscal policy I think is quite interesting. Fiscal policy has been in great focus in the UK in recent years. We had a big fiscal event in October. We had another fiscal event just now in March. The borrowing increase was less than what the market expected. Deficit projections are such that we are expecting deficit to fall from around 4.8 per cent this year to 3 per cent over the course of the next three years, and for debt to GDP ratio to remain at around 100 per cent of GDP. I would perhaps contrast that with France where our economist is expecting the deficit to remain north of 5 per cent over the course of the next two years.Finally, an important point to make is that the UK government amid trade shifts in the U.S. is looking for a closer relationship with the EU, or rather a trade reset with the EU. EU remains our closest trading partner and in the aftermath of Brexit, the current government has an ambition to improve trading in food and goods; and also to ensure that the UK is part of the European Defense Program, which would allow UK defense companies to partake in the defense and security path that the European Union presented in recent weeks. There is a summit being held on May 19th, and obviously the trade and corporation agreement is coming up for revision in 2026.So, we do think those relations between UK and the EU could become somewhat closer over the course of this year and next.But now a question from me, which is, what does all this mean on the strategy side? UK assets have obviously been quite unloved in recent years. Do you think that's about to change?Andrew Sheets: So again, I think it's pretty interesting that markets are anticipatory, and I think markets are pretty smart here. So, you've already seen the British pound, the currency do quite well. This year it's up against the dollar. You've seen the UK stock market do quite well. It's up about 5 per cent this year, despite the S&P 500 being down quite significantly.So, you're already seeing, I think, some signs that investors are warming up to the UK and you know, I do think that if our expectations play out, that could continue. You know, UK stocks do tend to be concentrated and slower growing, less exciting sectors. But their valuations are also less demanding. You know, the U.S. Stock Index trades at about 21 times next year's earnings. The UK stock market trades a little bit under 13 times next year's earnings.And I also think it's really important that if the Bank of England does cut interest rates more than the market expects, which again, as you discussed, is one of our expectations here at Morgan Stanley, that could be pretty supportive for the UK bond market, which continues to offer pretty high yields.Bruna, thanks for joining me for this conversation. It's always great to catch up with you.Bruna Skarica: My pleasure, Andrew. Thank you for the invite.Andrew Sheets: And thanks for listening. If you enjoyed the show, leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  • Can South Korea Afford To Grow Old?
    Our Chief Korea and Taiwan Economist Kathleen Oh discusses Korea's recent pension reform and its implications for the country's rapidly aging population.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I’m Kathleen Oh, Morgan Stanley’s Chief Korea and Taiwan Economist. Today I’ll revisit Korea's demographic emergency and how the recent pension reform is trying to address it.It's Thursday, May 1st, at 4pm in Hong Kong.Some of you may remember that I came on the show last fall to talk about the crisis-level demographic challenges in Korea. Korea officially became a super-aged society at the end of 2024. This means that more than 20 per cent of the population is 65 or older.In the face of its rapidly aging population and a fertility rate that has hit rock bottom, Korea is taking decisive action finally. The national assembly recently passed a landmark pension reform bill to amend the National Pension Act. This measure marks the first major change to its pension system in 18 years. And it’s supposed to improve the pension fund's financial sustainability to prepare for a rapidly aging population that will only accelerate from here.The amendments include raising pension contribution rates and adjusting the income replacement ratio to 43 per cent. These changes aim to delay the depletion of the fund to 2064 to 2071, in an upside scenario. Without this reform, the fund would have been depleted by 2055, just 30 years later.This reform avoids having to sell the fund's financial assets by delaying depletion. It also assures pension-holders of the stability of future pension assets. And, last but not least, it increases the pension fund's capacity for financial investments, which could lead to higher returns.This is the first step towards making legislative, and therefore more structural changes to respond to the reality of a super-aged society. Moreover, it kicks off a sweeping reform agenda that includes the pension program, labor market, education system, and capital markets.It’s also notable because the center-left Democratic Party of Korea and the conservative People Power Party were able to show bipartisan support and a public consensus to reach a deal, especially during the recent tumultuous political events that took place in Korea.That said, the reform also has some potentially negative economic impacts. Higher pension contributions could squeeze households' disposable income, putting mild but additional downward pressure on aggregate consumption and savings. Especially considering that as people age, they tend to consume less – and this can lead to a structural slowdown in private consumption.Despite Korea's challenges with an aging population, we're cautiously optimistic about its future – especially because [of] the recent rebound in the country's fertility rate. After marking a drop every year since 2015, it rebounded to 0.75 in 2024. While still far below the ideal replacement ratio of 2.1, this rebound is a small but certainly a positive sign.Looking ahead, Korea's working population is expected to decrease by 50 per cent in the next 40 years unless the country ensures a dramatic rebound in the fertility rate to 1.0 or higher by 2030. In the meantime, we expect further adjustments to the pension reform bill, we expect further discussions around lifting of retirement age, along with the labor market reform next in line on the economic front. The Korean government will continue to execute on its demographic policy agenda.Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  • A Possible Roadmap for U.S. Tariff Policy
    Our analysts Michael Zezas and Rajeev Sibal unpack the significance of a little-discussed clause in the Trump administration’s tariff policy, which suggests investors should think less about countries and more about products.Read more insights from Morgan Stanley.----- Transcript -----Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Morgan Stanley's Global Head of Fixed Income Research and Public Policy Strategy.Rajeev Sibal: And I am Rajeev Sibal, Senior Global Economist.Michael Zezas: Today we look through the potential escalation and de-escalation of tariff rates and discuss what the lasting impact of higher tariffs will be for companies and the economy.It's Wednesday, April 30th at 11am in New York.Rajeev Sibal: And 4pm in London.Michael Zezas: Last week during a White House News conference, President Trump announced that tariffs on goods from China will come down substantially, but it won't be zero. And this was after U.S. Treasury Secretary Scott Bessent made comments about high tariffs against China being unsustainable, according to some news reports.Now, some of this has been walked back, and there's further discussion of challenging negotiations with China and potential escalations if those negotiations don't go well. Meanwhile, Canadian voters elected a Liberal government, led by Mark Carney yesterday. That federal election played out against the backdrop of the U.S. proposing higher tariffs on its northern neighbors. So, Rajeev, amidst all this noise, what seems clear is that tariff levels will end up higher than where we started before President Trump took office. Though we don't exactly know how high they will be. What is it that investors need to understand about the economic impacts of higher tariffs just generically?Rajeev Sibal: So yeah, we do view that tariffs are going to structurally be higher than they were before the Trump administration. This has been a baseline of our outlook since last year. Now I think the challenge is figuring out where they're going to settle as you've highlighted. We do think that peak tariff was probably a couple weeks ago, when we were at the max pain threshold, vis-a-vis China and the rest of the world. We've since seen the reciprocal tariffs move to 10 per cent for everyone but China.China's clearly higher than 60 per cent today, but we do think that over time the implied rate to China will start to graduate and come down. If you look at the electronics exemption for example, that's a big step in getting the average tariff rate out of China lower. So, we think we're on a journey. We think we were past peak tariff pain in terms of level. But over the next few months, it's going to take some time and negotiation to figure out where we settle. And we are still looking to kind of our baseline outlook, that had been defined some time ago of a 10 per cent baseline with an elevated level on China, if you will.Michael Zezas: So, I think this is an important point, that there's a lot of back and forth about tariff levels, which countries are going to be levied on, to what degree, and to what products. But at the end of the day, we think there'll be more tariffs than where we started.Rajeev, you have a view on where investors should focus, in terms of what tariffs are durable. And maybe at the end of the day it'll be less about countries and more about products. Can you talk us through that?Rajeev Sibal: You know, on April 2nd when the Trump administration released the fact sheet about tariffs and reciprocal tariffs, there was a small clause in there that I think the market did not pay enough attention to, and which is becoming front and center now.And in that clause, they identified that a number of tariffs related to Section 232 would be exempted from reciprocal tariffs. And the notion is that country tariffs would evolve or shift into sector tariffs over time. And in the note that we recently published, we highlighted some of the legal mechanisms that may be at play here. There's still a lot of uncertainty as to how things will settle down, but what we do know is that legally speaking, country tariffs are coming through IEEPA, which is the International Emergency Economic Powers Act; whereas section and sector tariffs are coming through Section 232; and some of the other section structures that exist in U.S. trade law.And so, the experience of 2018 leaned a lot more to these sections than it did to IEEPA. And that was a guiding, I guess, mechanism for us, as we thought about what was happening in the current tariff structure. And the fact that the White House included this carve out, if you will, for Section 232 tariffs in their April 2nd fact sheet was a big lead indicator for us that, over time, there would be an increased shift towards sectors.And, so for us, we think the market should be focusing more in that direction. As we think about how this evolves over time, now that we've not completely de-escalated, but brought a materially lower tariff level and everywhere in the world except for China. The big variability is probably going to be in the sector tariffs now going forward.Michael Zezas: So, what sectors do you think are particularly in focus here?Rajeev Sibal: So, on the April 2nd fact sheet that the White House provided to countries and to the market, they specifically identified steel, aluminum, autos and auto parts as already having Section 232 tariffs. And we know that's true because those investigations had started in a prior Trump administration. And so, kind of the framework was already in place for them to execute those tariffs.The guidance then suggested that copper, pharmaceuticals, semiconductors, and lumber would also potentially fall under Section 232 tariffs in the future. And then there's been a range of indications as to what might be in play, so to speak, for Section 232.I know pharmaceuticals is at the top of the list of many investors, as are semiconductors. So, this is our kind of sample list, but we're pretty certain that this will evolve over time. But that's where we're starting.Michael Zezas: Okay, so pharmaceutical, semiconductors, automobile, steel, aluminum. It's a pretty substantial list. So, if that's the sort of end game landscape here – relatively elevated China tariffs, and then all of these products specific tariffs – what does an investor need to know about a company's options in this world? Can companies just rewire their supply chains around all of this? And you know, ultimately there's some temporary price pain. But once things are rewired around this, that should dissipate. Or are the decisions more difficult than that and that there has to be some cost passed through to the consumer or to the companies themselves – because this is just too many tariffs in too many places?Rajeev Sibal: Yeah, so I think the latter of your question – the difficulty – is really where we need to be thinking about what's happening here. If you think about the bigger picture, and you go back to the note that we collaborated on earlier in the year called Supply Chain Strain, we highlighted the complexity of moving factors of production and the extreme levels of investment that have required to shift factors of production.So, companies, if they're going to move a factory from country A to country B, have to make sure that country B has the institutional framework, that it has the capital, it has the labor input, and this is a big, big decision. So, as a company you're not going to make that decision to shift your investment or reconstruct productive facilities in a new country – until you understand the cost benefit analysis. And in order to understand the cost benefit analysis, you really need to know what the sector-based Section 232 tariff looks like in the end.If we remember back in 2018, the government tried to implement a wide range of tariffs. On average, it took about 250 days for each investigation to be completed. And that's a long timeframe. And so, I think what we're going through now, apart from automobiles and steel and aluminum where that process has kind of already been done, and we kind of have the framework of the tariffs and the new sectors, companies are going to have to wait for this investigation to take place so that they understand what the tariff level is. Because the tariff level is going determine the risk of actually shifting productive facilities. Or if you just kind of absorb the cost because the tariff isn't at a high enough level that it incentivizes the shift.And so, these are the changes that I think remain an open question and will be the focus of companies over the next few months as their sectors are exposed to tariffs.Michael Zezas: Right. So, what I think I'm hearing then, and correct me if I'm wrong, is that some of the focus on the China tariffs or the country level specific tariffs in the headlines – about they're moving up, they're moving down – might mask that at the end of the day, we're still dealing with considerably higher tariffs on a broad enough array of products; that it will mean difficult choices for companies and/or higher costs. And so therefore markets are still going to have to price some of the economic challenges around that.Rajeev Sibal: Yeah, I think that's absolutely right. And we've seen the market try to price some of this stuff at a country level context. But it's been hard. And, you know, even the headline tariff rate in the U.S. is really hard to pin down for the simple reason that we don't know if the Mexican and Canadian trade into the U.S. is compliant or non-compliant, and how that gets counted in the current structure of the tariff regime. And so, as these questions remain outstanding, markets are going to be volatile, trying to figure out where the tariff level is. I think that uncertainty at a country level then shifts to the sector level as we go through these investigations that we've been highlighting.Autos is a great example. We finished the investigation. We've implemented a Section 232 tariff, and we still don't know what the implied auto tariff rate is because we don't know how many parts in a car are compliant within existing free trade agreements of the United States; and if they're compliant or not really determines what the implied tariff level is for the U.S. And until companies can decide and give forward guidance and understand what their margins look like, I think markets are going to be in this guessing game.Michael Zezas: Yeah, and that certainly syncs up with our fixed income strategy views. The idea that yield curves will continue to steepen to deal with the uncertainty about U.S. trade policy and demand for dollars, as a consequence. That equity markets might be moving sideways as perhaps we priced in some of the first order effects of tariffs, but not necessarily the second order, potentially non-linear effects on the broader global economy. And unfortunately, the lingering uncertainties that you talk about implementation, they're going to be with us for awhile.Rajeev Sibal: Yeah, I think that's really fair. And our economics outlook mirrors that as well.Michael Zezas: Well, Rajeev, thanks for joining us today to help us sort through all of thisRajeev Sibal: Mike, thanks for having me on the podcast.Michael Zezas: And to all of you, thanks for listening. If you found this podcast helpful, let us know and share Thoughts on the Market with a friend or colleague today.
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  • Is the Oil Market Flashing a Potential Recession Warning?
    Our Global Commodities Strategist Martijn Rats discusses the ongoing volatility in the oil market and potential macroeconomic scenarios for the rest of this year.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I’m Martijn Rats, Morgan Stanley’s Global Commodities Strategist. Today on the podcast – the uncertainty in the oil market and how it can play out for the rest of the year.It’s Tuesday, April 29th, at 3pm in London.Now, notwithstanding the energy transition, the cornerstone of the world’s energy system is still the oil market; and in that market, the most important price is the one for Brent crude oil. Therefore, fluctuations in oil prices can have powerful ripple effects on various industries and sectors, as well as on the average consumer who, of course, pays attention to gasoline prices at the pump. Now with that in mind, we are asking the question: what's been happening in the global oil market recently?Earlier this month, Brent crude oil prices dropped sharply, falling 12.5 per cent over just two trading sessions, from around 75 dollars a barrel to close to 65 dollar a barrel. That was primarily driven by two factors: first, worries about the impact of trade wars on the global economy and therefore on oil demand, after the Trump administration’s announcement of reciprocal tariffs.Secondly, was OPEC’s announcement that, notwithstanding all the demand uncertainty that this created, it would still accelerate supply growth, progressing not only with the planned production increases for May; but bring forward the planned production increases for June and July as well. Now you can imagine, when OPEC releases extra production whilst the GDP outlook is weakening, understandably, this weighs on the price of oil.Now to put things into context, two-day declines of 12.5 per cent are rare. The Brent futures market was created in 1988, and since then this has only happened 24 times, and 22 of those instances coincided with recessions. So therefore, some commentators have taken the recent drop as a potential sign of an impending recession.Now while Brent prices have recovered slightly from the recent lows, they’re still very volatile as they continue to reflect the ongoing trade concerns, the economic outlook, and also a strong outlook for supply growth from OPEC and non-OPEC countries alike. The last few weeks have already seen unusually large speculator selling. So with that in mind, we suspect that oil prices will hold up in the near-term. However, we still see potential for further headwinds later in the year.In our base case scenario, we expect that demand growth will slow down to approximately 0.5 million barrels a day year-on-year by the second half of 2025, and that is down from an an initial estimate earlier in the year when were still forecasting about a million barrel a day growth over the same period. Now this slowdown – coupled with an increase in non-OPEC and OPEC supply – could result in an oversupply of the market of about a million barrels a day over the remainder of 2025. Now with that outlook, we believe that Brent prices could eventually drop further down into the low-$60s.That said, let's also consider a more bearish scenario. Oil demand has never grown continuously during recessions. So if tariffs and counter-tariffs tip the economy into recession, oil demand growth could also fall to zero. In such a situation, the surplus we're currently modeling could be substantially larger, possibly north of 1.5 million barrels a day. Now that would require non-OPEC production to slow down more severely to balance the market. In that scenario, we estimate that Brent prices may need to fall into the mid-$50s to create the necessary supply slowdown.On the flip side, there's also a bullish scenario where we and the market are all overestimating the demand impact. If oil demand doesn't slow down as much as we currently expect and OPEC were to revert quite quickly back to managing the supply side again, then inventories would still build but only slowly. Now in that case, Brent could actually return into the low-$70s as well.All in all, we would suspect that the twin headwinds of higher-than-expected trade tariffs and faster-than-expected OPEC+ quota increases will continue to weigh on oil prices in the months ahead. And so we have lowered our demand forecast for the second half of the year to just 0.5 million barrels a day, year-on-year. And we’ve also lowered our prices forecasts for 2026; we’re now calling for $65 a barrel – that’s $5 a barrel lower than we were forecasting before.Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  • What Should Investors Expect from Earnings Season?
    Our CIO and Chief U.S. Equity Strategist Mike Wilson discusses how market volatility over the last month will affect equity markets as earnings season begins.Read more insights from Morgan Stanley. ----- Transcript -----Welcome to Thoughts on the Market. I'm Mike Wilson, Morgan Stanley’s CIO and Chief U.S. Equity Strategist. Today, I will discuss what to expect from Equity markets as we enter the heart of earnings season. It's Monday, April 28th at 11:30am in New York. So, let’s get after it. The S&P 500 tested both the lower and upper ends of our 5000-5500 range last week, reinforcing the notion that we remain in a volatile trading environment. Incrementally positive news on a potential tariff deal with China and hope for a more dovish Fed lifted stocks into the end of the week, and the S&P 500 closed slightly above the upper end of our range. While a modest overshoot of 5500 can persist very short-term, a sustainable break above this level is dependent on developments that have yet to come to fruition. Those include a tariff deal with China that brings down the effective rate materially; a more dovish Fed; 10-year Treasury yields falling below 4 percent without recessionary risks increasing; and a clear rebound in earnings revisions. Bottom line, until we see clear positive shift in one or more of these factors, range trading is likely to continue with risks to the downside given that we are now at the top end of the range. A frequent question we're getting from clients is does the soft data matter for equities or is the market waiting for the hard data to make up its mind in terms of an upside or downside breakout above or below this range? Our view has been consistent that the most important macro data at this stage is from the labor market while the most important micro data are earnings revisions. Equities have already priced a meaningful slowdown in growth relative to expectations. What's not priced is a labor cycle or recession. While this risk has been reduced to some extent given the recent, more dovish tone shift on tariffs from the administration, it's far from extinguished. Until we see clear evidence over multiple months that the labor market remains solid, a recession will likely remain a coin toss. One soft data point to pay attention to this week that could move the market is the April ISM Manufacturing data on May 1st. Recall this series accelerated the August 2024 selloff ahead of a soft July payroll report. The most important takeaway from an equity strategy perspective is to stay up the quality curve. No matter what the hard data says, we remain in a late cycle backdrop where both quality and large cap relative outperformance should continue. While uncertainty remains higher than usual, defensives should continue to do well. However, given their relative outperformance over the past year, it also makes sense to pick spots in high quality cyclicals that have already discounted a material slowdown in both macro conditions and earnings. To be clear, this is not a blanket call on cyclicals; it's a selective, stock-specific one. More specifically, look for quality, cyclical stocks that are more de-risked based on what the stocks are pricing from a forward earnings growth standpoint. See our written research for stock screens. And from a global standpoint, we recommend favoring U.S. over international equities at this point as a weaker dollar should benefit U.S. relative earnings revisions, particularly versus Europe and Japan. Furthermore, less volatile earnings growth and a higher quality bias should benefit the U.S. on a relative basis in today's late cycle backdrop. Thanks for listening. If you enjoy the podcast, leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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