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Morgan Stanley with the note.
With markets trading more defensively, investors need to decide if the risk off message is due to slowing growth or the Russia/Ukraine tensions. It’s probably a bit of both but we highlight the rising correlation of equity returns vs. fundamentals and the growing risk to earnings.
Rising tensions… Over the past few weeks, Russia/Ukraine headlines have taken center stage for markets but our work suggests slowing growth is just as important. While we have no edge on whether Russia will invade Ukraine,a lot has been priced.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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