February 1, 2026 09:53 PM GMT China Market-Wise | Asia Pacific Capturing Divergence in a Still Healthy Market Setup Despite the latest global volatility, we believe China market's positive liquidity setup stays intact, with effective A-share cooling measures, stronger USDCNY, and early signs of long-run regulatory support for HK. Prefer large vs. small-cap in A-shares, and H vs. A if global volatility subsides. Both Hong Kong and China's A-share market pulled back meaningfully on January 30, which we think ...

Summary of the Conference Call on Japan's Fiscal Position Industry Overview - **Industry**: Japan's Fiscal and Economic Situation - **Company**: Morgan Stanley Asia Limited Key Points and Arguments 1. **Exaggerated Concerns**: The market's worries regarding Japan's fiscal health are considered overstated, with the current fiscal situation being one of the healthiest in the past 28 years, based on cash flow statistics [7][14][19]. 2. **Fiscal Deficit Reduction**: Japan's fiscal deficit has significantly narrowed to only 0.5% of GDP, the lowest level since 1998, compared to the median level of approximately 3% for developed economies [7][14][19]. 3. **Debt-to-GDP Ratio**: The government debt-to-GDP ratio has decreased by 22 percentage points compared to pre-pandemic levels, indicating improved fiscal health [7][19]. 4. **Primary Balance Forecast**: The primary balance is expected to improve to -0.1% of GDP for FY2026, significantly better than the levels required for debt stability [9][35][32]. 5. **Interest Payments**: Interest payments on government debt are projected to remain low, currently around 1.5% of GDP, and are expected to rise gradually to about 2% by FY2028 [31][28]. 6. **Sustainable Debt Structure**: Japan is noted for having one of the most sustainable debt structures among developed markets, with a favorable "r-g" dynamic (the difference between real interest rates and real GDP growth) supporting debt sustainability [9][45][50]. 7. **Tax Revenue Growth**: Strong nominal GDP growth post-pandemic has led to increased tax revenues, aiding in the reduction of the fiscal deficit [24][20]. 8. **Unused Budget Funds**: A significant portion of the government budget remains unspent, with over 2% of GDP in unused budget expenditures for FY2024, suggesting that reported fiscal expansions may be overstated [24][20]. 9. **Inflation and Interest Rates**: Core inflation in Japan is low at 1.5%, significantly below the U.S. core PCE of 2.8%, indicating that aggressive interest rate hikes by the Bank of Japan may not be necessary [26][25]. 10. **Comparative Fiscal Health**: Japan's fiscal deficit is among the narrowest in developed economies, with projections indicating that even with a slight increase in the deficit to 1.9% of GDP in 2026, Japan will still maintain a favorable position compared to peers [19][14][36]. Other Important Insights - **Market Reactions**: Recent political developments, such as proposed tax cuts, have heightened market concerns about Japan's fiscal outlook, leading to rising yields on Japanese government bonds (JGBs) [7][5]. - **Long-term Projections**: The Cabinet Office's long-term fiscal forecasts indicate a stable outlook for Japan's fiscal health, with expectations of continued improvement in the primary balance and debt ratios [31][33]. - **Global Context**: Japan's fiscal improvements are contrasted with rising debt levels in other developed economies, particularly the U.S., where the debt-to-GDP ratio has been increasing [38][39]. This summary encapsulates the key insights from the conference call regarding Japan's fiscal position, highlighting the overall positive outlook despite market concerns.

January 26, 2026 05:35 PM GMT Cross-Asset Spotlight | Global Rates Whiplash Signals, Flows, & Key Data: A weekly summary of key cross-asset monitors, data, moves, and models tracking sentiment, fund flows, and positioning. Last week, 40-year JGB yields surpassed 4% for the first time amid fiscal concerns and MSCI Europe retreated on possible Greenland-related tariffs. Key highlights from last week: Exhibit 1: Morgan Stanley forecasts | Soham Sen | | | --- | --- | | Strategist | | | Soham.Sen1@morganstanley. ...

M Morgan Stanley Research: Key Forecasts January 26, 2026 07:59 PM GMT Next 12-Months Outlook: Our High-Conviction Calls | | | | | | MS Top Down EPS YoY% | | | --- | --- | --- | --- | --- | --- | --- | | Index (Local Ccy) | 01/23/2026 | MS Dec 2026 Price Target Current P/E | | MS Dec 2026 P/E Target | 2025e | 2026e | | S&P 500 | 6,916 | 7,800 | 22.0x | 22.0x | 272 | 317 | | | | | | | +12% | +17% | | MSCI Europe | 2,417 | 2,600 | 15.5x | 17 | 137 | 143 | | | | | | | -1.6% | 3.8% | | Topix | 3,630 | 3,600 | 1 ...

Core Viewpoint - Morgan Stanley analyst Michael Cyprys has raised the price target on Nasdaq (NDAQ) to $116 from $113 while maintaining an Overweight rating on the shares, indicating a positive outlook for the company [1]. Group 1: Revenue Growth - The firm anticipates that cyclical tailwinds will accelerate revenue growth across the Solutions business through 2026-27, suggesting a robust growth trajectory for Nasdaq [1]. - Durable underlying secular tailwinds are also expected to persist, further supporting the company's revenue potential [1].

Core Insights - Morgan Stanley has raised its forecast for China's humanoid robot sales in 2026, expecting a 133% increase this year to 28,000 units, doubling the previous estimate of 14,000 units [1] - The humanoid robot market in China is projected to grow exponentially, from approximately 12,000 units in 2024 to 262,000 units by 2030, and reaching 2.6 million units by 2035 [1] Industry Growth and Cost Reduction - The production costs for robots are expected to decline, lowering the purchase threshold; raw material costs for robot production in China are anticipated to decrease by 16% this year [3] - By 2035, global component prices are expected to drop by about 70%, leading to significant price reductions for humanoid robots [3] - Prices for humanoid robots in middle and low-income countries, including China, are projected to fall from $50,000 in 2024 to approximately $21,000 by 2050 [3] Market Penetration and Application - By 2036, the number of humanoid robots in use globally is expected to reach 25.4 million, accounting for 2% of the overall robot market, with this share increasing to 13% by 2040 and 42% by 2044 [3] - By 2050, the global deployment of humanoid robots may exceed 1 billion units, with over half of these applications in middle and high-income countries [3] China's Dominance in Humanoid Robotics - China is currently the largest market for humanoid robot applications, with over 80% of the global deployment expected by 2025 [3] - The domestic humanoid robot industry has begun extensive market promotion, with several manufacturers partnering with the CCTV Spring Festival Gala to showcase their products [4][5] Investment and Industry Trends - The increasing presence of robot manufacturers at the Spring Festival Gala reflects three major industry trends: focus on consumer-level applications, reaching the C-end market, and transitioning from experimental technology to commercial deployment [7] - A report by IDC indicates that the humanoid robot market will experience explosive growth in 2025, with an estimated shipment of 18,000 units and sales of approximately $440 million, marking a year-on-year increase of about 508% [7] Government Support and Competitive Landscape - Since 2015, the Chinese government has prioritized robotics as a key industry, leading to rapid development and the establishment of over 150 humanoid robot companies [8] - The government has implemented policies to support the robotics industry, aiming for China to achieve international leadership in robotics by 2035 [8] - Elon Musk has acknowledged that China's humanoid robot sector poses the most significant competition for Tesla, highlighting China's manufacturing capabilities and advancements in AI technology [9]

Core Insights - Morgan Stanley has raised its forecast for China's humanoid robot sales in 2026, expecting a 133% increase this year to 28,000 units, doubling the previous estimate of 14,000 units [1] - The humanoid robot sales in China are projected to grow exponentially, from approximately 12,000 units in 2024 to 262,000 units by 2030, and reaching 2.6 million units by 2035 [1] Group 1: Market Growth and Projections - The production cost of robots is expected to decline, lowering the purchase threshold for humanoid robots, with raw material costs in China projected to decrease by 16% this year [3] - By 2035, global prices for related components are expected to drop by about 70%, leading to significant price reductions for humanoid robots [3] - The average price of humanoid robots in middle and low-income countries, including China, is expected to fall from $50,000 in 2024 to approximately $21,000 by 2050 [3] - In developed countries like the U.S., the average price is projected to decrease from $200,000 to $75,000 in the same timeframe [3] - By 2036, the number of humanoid robots in use globally is expected to reach 25.4 million, accounting for 2% of the overall robot market, with this share increasing to 13% by 2040 and 42% by 2044 [3] Group 2: Industry Trends and Developments - The humanoid robot industry in China is entering a phase of market promotion, with several manufacturers collaborating with the CCTV Spring Festival Gala to showcase their products [4][5] - The participation of multiple robot manufacturers in the Spring Festival Gala reflects three key industry trends: focus on consumer-level applications, reaching the C-end market, and transitioning from experimental technology to commercial deployment [7] - A report by IDC indicates that the humanoid robot market will experience explosive growth in 2025, with an estimated shipment of 18,000 units and sales revenue of approximately $440 million, marking a year-on-year increase of about 508% [7] - Chinese manufacturers are leading the market, with companies like Zhiyuan Robotics and Yushutech being significant players in terms of shipment volume [7] Group 3: Competitive Landscape - Since 2015, when China prioritized robotics as one of its top ten key industries, the sector has seen rapid development, with over 150 humanoid robot companies currently operating [8] - Government support has been crucial, with policies aimed at enhancing R&D and promoting the integration of robots into economic and social frameworks [8] - China possesses unique advantages in manufacturing application scenarios and data collection capabilities, which are critical for the development of embodied intelligence [9] - Elon Musk has acknowledged that China's humanoid robot sector represents the most formidable competition for Tesla, highlighting China's strengths in large-scale manufacturing and AI technology [9]

Core Insights - Morgan Stanley's strategic shift towards wealth and asset management has significantly reduced its reliance on the volatile nature of dealmaking and trading, with the wealth and asset management segments contributing 54% to total net revenues in 2025, up from 26% in 2010 [1][10] Wealth and Asset Management Growth - The wealth and asset management sectors are characterized by recurring fee streams, which provide more stability compared to transaction-heavy investment banking [2] - By the end of 2025, total client assets in Wealth and Investment Management reached $9.3 trillion, supported by $356 billion in net new assets, moving closer to the company's $10 trillion target [4][10] Strategic Acquisitions - Morgan Stanley has enhanced its market position through strategic acquisitions, including E*TRADE, Eaton Vance, Shareworks (formerly Solium), and EquityZen, which have broadened distribution and deepened client engagement [3][10] Peer Comparison - In comparison, JPMorgan's Asset & Wealth Management segment reported net revenues of $6.5 billion in Q4 2025, with assets under management reaching $4.8 trillion [6] - Goldman Sachs' Asset & Wealth Management division generated net revenues of $4.72 billion in Q4 2025, with assets under supervision totaling $3.61 trillion [7] Valuation and Earnings Estimates - Morgan Stanley's shares have appreciated by 28% over the past six months, and the company trades at a price-to-tangible book ratio of 3.69, above the industry average of 3.11 [8][11] - Earnings estimates for 2026 suggest an 8.4% year-over-year increase, with 2027 earnings expected to grow by 7.1% [12][13]

Core Viewpoint - Investment banks are regaining prominence as deal-making and IPO activities increase, with Morgan Stanley and Jefferies Financial Group presenting different investment opportunities [2][3]. Morgan Stanley - Morgan Stanley's investment banking (IB) fees increased by 23% in 2025 and 35% in 2024, following a decline in 2023 and 2022, indicating a strong recovery in the IB sector [3][9]. - The company has a robust trading business that has performed well due to market volatility and client activity, which is expected to continue growing [4]. - A partnership with Mitsubishi UFJ Financial Group has strengthened Morgan Stanley's position in Japan, with Asia region revenues rising 23% year-over-year to $9.42 billion in 2025 [5]. - Morgan Stanley has diversified its revenue streams, with wealth and asset management contributing nearly 54% to total net revenues in 2025, up from 26% in 2010 [6]. - The company is projected to see revenue growth of 6% and 4.9% in 2026 and 2027, respectively, with earnings expected to grow by 8.4% and 7.1% in the same years [18]. Jefferies Financial Group - Jefferies' total IB fees rose by 10% in fiscal 2025 and 52% in fiscal 2024, indicating a recovery after previous declines [7]. - The company is benefiting from strategic partnerships, including a significant stake from Sumitomo Mitsui Financial Group, which is expected to increase to 20% [9][10]. - Jefferies' revenue growth estimates for fiscal 2026 and 2027 are 16.5% and 16.3%, respectively, with earnings expected to jump by 50.3% and 38.1% [20]. Comparative Analysis - Morgan Stanley shares have increased by 31.8% over the past year, while Jefferies shares have decreased by 20.4%, indicating stronger investor sentiment towards Morgan Stanley [11][14]. - In terms of valuation, Jefferies is trading at a forward P/E of 13.03X, while Morgan Stanley's forward P/E is 16.46X, suggesting Jefferies is less expensive [14][16]. - Morgan Stanley's return on equity (ROE) stands at 16.92%, significantly higher than Jefferies' 7.27%, reflecting more efficient use of shareholder funds [16]. - Morgan Stanley's diversified revenue model and strong trading franchise position it as a more resilient investment compared to Jefferies, which is primarily focused on investment banking [22][23].

Core Viewpoint - BlackRock, Morgan Stanley, and Partners Group have collaborated to launch a new offering of separately managed accounts focused on alternative investments, providing advisors with a diversified option for their clients [1] Group 1: New Offering Details - The new separately managed accounts are designed around specific investment goals and include exposure to seven underlying private funds [1] - The offering encompasses various asset classes, including private equity, private credit, and real assets, catering to the growing demand for alternative investments [1]