Morgan Stanley CEO Ted Pick expressed optimism about U.S. stocks on Thursday, believing that the U.S. economy will continue to perform well in 2025. He praised the Fed's cautious approach and noted that Trump could bring inflation risks.

Pick stated at the Morgan Stanley summit in Singapore: "The world is still driven by American consumers, and the balance sheets of American companies are generally very good."

He indeed acknowledged that there would be some cautious sentiment in the market due to factors such as policy uncertainty, but "overall, people naturally continue to hold a constructive view."

Pick stated that Morgan Stanley predicts the S&P 500 Index will rise, noting that sectors such as financials and industrials may perform well as the economy continues to grow and some deregulation measures are implemented.

He also mentioned that although the market may sometimes decline, the overall momentum seems to indicate that the outlook for 2025 will be better.

David Kelly, Chief Global Strategist at J.P. Morgan Asset Management, also agreed with Pick’s views on U.S. stocks. He pointed out that strong corporate earnings and the broader U.S. economy should continue to drive the stock market higher in 2025.

Kelly stated that to hedge risks, investors should increase exposure to overseas stocks. International equities have long-term growth potential, and the dividend yield is twice that of U.S. stocks.

The S&P 500 Index has risen over 24% year-to-date, while the Dow Jones Industrial Average has increased by 15.13%.

Regarding the Federal Reserve, Pick said the central bank is doing "very well." He pointed out that the Fed has taken a cautious approach, which is the "right thing to do," and added that the Fed does not want to reverse its decision to cut interest rates.

When asked if he was concerned about a potential new trade war after the Trump administration comes to power, Pick succinctly replied: "The biggest risk is a combination of a series of geopolitical and policy mistakes." Pick added that although his view is that the U.S. economy is growing, inflation could potentially overheat and suppress growth due to de-globalization and tariff-related factors.

U.S. presidential candidate Donald Trump has threatened to impose a 60% tariff on goods imported from China, as well as a 10%-20% tariff on global imports.

Morgan Stanley Chief Economist Seth Carpenter said on Wednesday that the tariffs proposed by Trump would harm U.S. economic growth in 2026.

Pick pointed out that both China and the U.S. have a "shared impetus" to find solutions that can "promote growth" in both economies.

Article forwarded from: Jin Shi Data