Morgan Stanley's View on Asset Restructuring

U.S. Stock Market:

The style allocation in 2026 is likely to continue the characteristics of 2025, with market congestion, concentration, and a 'winner-takes-all' pattern possibly reaching new extremes. Taking the S&P 500 index as an example, Morgan Stanley Global Research predicts that the AI supercycle will drive a 13%-15% super trend profit growth over at least the next two years.

Japanese Stock Market:

The new Japanese Prime Minister Sanae Takaichi's 'Takaichi Economics' and corporate reform processes are expected to strengthen the Japanese stock market in 2026. Companies may focus more on releasing excess cash, leading to increased capital investment, wage growth, and shareholder returns. Moreover, 'Takaichi Economics' is expected to revive middle-class consumption and strategic investment, providing further support for the market.

Emerging Market Stock Market:

With local interest rates declining, profit growth accelerating, valuations being attractive, corporate governance continuously improving, fiscal conditions becoming healthier, and global growth being resilient, the emerging market stock market has a strong foundation for performance in 2026. The Chinese private sector may show signs of recovery; South Korea continues to benefit from corporate governance reforms and AI development. In other regions, Latin America is expected to achieve significant upside driven by strong monetary policy stimulus and key political changes.

Global Economic Outlook:

Morgan Stanley believes that the global economic expansion is at a critical juncture. Although GDP growth remains resilient in 2025, the demand is gradually leaning towards technology capital expenditures, and employment growth stagnation has led to structural imbalances.