Joining us right now is Mike Wilson. He is the CIO and chief US equity strategist at Morgan Stanley. And Mike, there have been so many questions about what's happening in the market.Volatility has definitely stepped up, but you've been of this long-term view um that we're in pretty good times for quite a while to come. You still feeling that. >> Yeah, I think our differentiated view is what we've talked about I think in the last time I was on the show is that we we believe that we are in a rolling recession ...

Morgan Stanley chief equity analyst Mike Wilson has been saying for years the U.S. was in a “rolling recession” when economists were seeing nothing but GDP growth. Since April, he’s been declaring a “rolling recovery,” with the early stages of an economic boom working its way through various sectors in the economy. His optimism has been borne out by an economy that has surprised to the upside consistently throughout 2025, with skeptics warning the impact of tariffs and wider macroeconomic uncertainty would ...

Summary of Key Points from the Conference Call Industry Overview - The discussion revolves around the US equity market and the Federal Reserve's monetary policy, particularly in the context of a potential economic recovery and the implications for earnings growth and inflation. Core Insights and Arguments 1. **Transition from Recession to Recovery**: The analysis suggests that the rolling recession has ended, and the market is transitioning to an early cycle recovery, indicated by positive operating leverage, falling wage costs, and pent-up demand across various sectors [4][6][10]. 2. **Earnings Revisions and Economic Indicators**: There is a notable acceleration in earnings revisions breadth, which is expected to signal a material increase in the ISM PMI, suggesting stronger-than-expected earnings growth [4][10]. 3. **Fed's Monetary Policy**: The recent 25 basis points cut by the Fed is viewed as a "hawkish cut," and there is concern that the Fed may not be responding quickly enough to market expectations, particularly regarding labor market data [4][20][28]. 4. **Inflation and Revenue Growth**: The correlation between inflation and revenue growth is emphasized, with the expectation that if the Fed cuts rates while inflation remains elevated, revenue and earnings growth could exceed expectations [5][23]. 5. **Market Dynamics and Small Caps**: The report discusses the potential for small-cap stocks to outperform once the Fed adopts a more accommodative stance, as historically, small caps tend to perform better when the Fed is ahead of the curve [27][29]. Additional Important Insights 1. **Labor Market Dynamics**: The analysis indicates that the labor market has been in a rolling recession, with government hiring masking underlying weaknesses. The true state of the labor market may not be reflected until later data releases [27][28]. 2. **Liquidity Concerns**: There are signs of tightening liquidity due to the Fed's quantitative tightening and increased Treasury supply, which could lead to market corrections if not addressed [32]. 3. **Sector Performance**: The report includes a fresh money buy list with various companies, indicating a focus on sectors like healthcare, real estate, and consumer staples, while noting the performance of these stocks relative to the S&P 500 [37][50]. 4. **Market Sentiment and Technical Indicators**: The report highlights the importance of monitoring bond volatility and the spread between SOFR and Fed Funds as indicators of potential market corrections [32][36]. This summary encapsulates the key points discussed in the conference call, focusing on the implications for the US equity market, the Federal Reserve's actions, and the overall economic outlook.