Morgan Stanley(US:MS) Hua Er Jie Jian Wen·2025-11-12 09:34Core Viewpoint - The focus of the market is shifting from the political deadlock to the release of delayed economic data and its impact on the Federal Reserve's interest rate decision in December, following the anticipated end of the U.S. government shutdown [1]. Economic Data Release Timeline - Morgan Stanley predicts that once the government resumes operations, delayed economic data will begin to be released, with significant delays expected due to the shutdown covering the entire month of October [1][5]. - Key data such as September employment and inflation (PCE), retail sales, and some trade and manufacturing indicators are expected to be available before the Federal Reserve's meeting on December 9-10 [5][6]. - The September employment report is anticipated to be released on November 19, followed by September retail sales and PPI on November 26, and the third-quarter GDP on December 5 [3][4]. Federal Reserve's Interest Rate Decision - Despite the data delays, Morgan Stanley maintains its core view that the Federal Reserve will cut rates by 25 basis points in December, driven by weak labor demand and rising unemployment [6]. - The report forecasts that non-farm payrolls will increase by only 50,000 in September, with the unemployment rate remaining at 4.3%, and expected to rise to 4.5% in October and November [6]. Market Risks and Reactions - Investors face asymmetric risks where "good news" could turn into "bad news" for the market, as the Federal Reserve will rely heavily on incoming data to guide its decisions [7]. - If economic data is weak, it may not lead to significant market volatility unless there is a sharp economic downturn [8]. - Conversely, strong employment data could challenge the prevailing narrative of rate cuts, prompting a reassessment of the Federal Reserve's policy path and potentially pressuring risk assets [8].