
Global financial markets have recently rebounded following a rollercoaster ride earlier this month, with the S&P 500 enjoying one of its longest winning streaks since November last year. This resurgence is largely fueled by renewed optimism for an economic soft landing following July’s better-than-expected retail sales and consumer inflation data, which helped alleviate earlier fears of an economic slowdown.
However, with an election looming and escalating geopolitical tensions, there is likely to be more volatility in the upcoming months. That said, leading investment bank Morgan Stanley (MS) is advising investors to focus on defensive stocks, anticipating ongoing market turbulence until there's clearer evidence of sustained growth or a Federal Reserve policy shift. The firm's note suggests that current stock valuations are high and already reflect optimal growth scenarios, adding to the uncertainty.