Morgan Stanley speaks of paradigm shift and endorses warning on economic uncertainty
Stock selection of winning companies becomes even more relevant in the face of new scenario, says Ted Picks, vice president of the American bank
The pessimistic chorus about the future of the global economy has gained another strong representative: Ted Picksvice president of Morgan Stanleyone of the leading US investment banks.
The reasons, for Picks, are clear. “It is an extraordinary moment. We have our first pandemic in 100 years, the first European invasion in 75 years and the first global inflation in 40 years,” Ted Picks said at an event in New York last week, according to CNBC. The combination of factors, he said, “signals a paradigm shift” and the end of an era of monetary stimulus.
The new era, according to Picks, will be one of interest rates above inflation and additional risks to the stock market. “We have long had to consider what a world is like with real interest rates and real cost of capital that will distinguish winning companies from losing companies, winning stocks from losing stocks”
But the paradigm shift won’t happen overnight, Picks said, and should take between 12 and 24 months.
The statements by the vice president of Morgan Stanley go against the utmost caution of some of the main names on Wall Street.
JP Morgan president Jamie Dimon even warned of the arrival of a “hurricane” in the global economy in the last week. Earlier this month former Goldman Sachs chairman Lloyd Blankfein spoke of a “very, very high” risk of recession in the United States.