Morgan Stanley downgrades global equities; sees U.S. as ‘defensive’ market amid Mideast conflict

Morgan Stanley downgraded global equities and upgraded cash and U.S. government bonds as investors move to safe-haven assets amid heightened uncertainty from the Middle East war. Expect continued risk-off positioning with reduced equity exposure, stronger demand for U.S. Treasuries and cash, and increased volatility and downward pressure on equity prices as flows into sovereign debt accelerate.

Analysis

Morgan Stanley downgraded global equities and upgraded cash and U.S. government bonds as investors move to safe-haven assets amid heightened uncertainty from the Middle East war. Expect continued risk-off positioning with reduced equity exposure, stronger demand for U.S. Treasuries and cash, and increased volatility and downward pressure on equity prices as flows into sovereign debt accelerate.