The excellent Michael Wilson at Morgan Stanley kicks us off.
Having spent the last few weeks on the road engaging with clients from around the world, we figured it would be useful to share some thoughts from our meetings and to touch on the most often asked questions, concerns and pushback to our views.
First, conviction levels are low given broadly elevated valuations and a challenging macro/fundamental backdrop. While many individual longs and shorts have worked well in the context of a buoyant S&P 500, the most favored (and crowded) trades have largely played out in many clients’ eyes, and they are having trouble finding the next fat pitch. Small cap and low quality positions have worked on the short side, and we continue to see crowding into mega cap tech and consumer staples stocks as safe havens in a deteriorating macro environment.
