Morgan Stanley(US:MS) Hua Er Jie Jian Wen·2025-12-08 02:39Group 1 - The core focus of Morgan Stanley's 2026 outlook report is on AI investments, Federal Reserve policy paths, and credit market prospects, which has sparked intense debate among clients [1] - Morgan Stanley predicts that the total issuance of investment-grade bonds in the U.S. will surge to $2.25 trillion in 2026, driven by capital expenditures and M&A activities, with a moderate widening of credit spreads by about 15 basis points [1][5] - The firm maintains its view that major central banks will continue to adopt accommodative policies, expecting further rate cuts from the Federal Reserve and the European Central Bank by 2026, which contrasts with some market expectations [1][7] Group 2 - Morgan Stanley emphasizes that the demand for computing power will significantly exceed supply in the coming years, driving an investment boom in AI and data centers, with credit markets being a key funding channel [2] - The firm anticipates that the total issuance of investment-grade bonds will increase by 25% year-on-year, with net issuance reaching $1 trillion, a 60% year-on-year growth [5] - Factors stabilizing credit spreads include high-quality issuers dominating AI-related issuances, ongoing policy easing, a mild economic re-acceleration, and sustained demand from yield-seeking investors [6] Group 3 - The debate around the shape of the yield curve is prominent, with general agreement on further steepening, but differing views on whether it will be driven by falling rates (bull steepening) or rising long-term rates (bear steepening) [8]