Bloomberg Talks Morgan Stanley CIO Mike Wilson Talks Market, AI Trade
May 30, 2025
Mike Wilson, Chief U.S. Equity Strategist and CIO at Morgan Stanley, shares his insights on the delicate state of the markets, including the bond market's challenges and CEO signals of potential layoffs. He discusses the evolution of AI from infrastructure to application development, predicting significant productivity boosts by 2026-2027. Additionally, Wilson analyzes the crucial dynamics of the 10-year yield, offering a perspective on global influences and comparing U.S. strategies to Japan's quantitative easing.
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Market Fragility Moves to Bonds
- Market fragility has shifted from stocks to the bond market, especially U.S. Treasuries and Japanese Government Bonds.
- Corporate caution eased as tariff concerns abated, buying the market more time and loosening financial conditions.
Stocks Benefit from Rate of Change Bottom
- Stocks and economies are reflexive, with earnings revisions and AI growth bottoming, signaling a better second half.
- Fiscal and monetary policies appear to have peaked in hawkishness, supporting a market rate-of-change bottom.
Policy Induces Mini Market Bubbles
- Policy responses have fostered mini-bubbles in assets, but current AI investing is not a broad bubble like the 1990s tech boom.
- Buy-the-dip behavior is driven by continual policy interventions over 15 years to halt market troubles.