{"id":45996,"date":"2023-08-08T14:49:22","date_gmt":"2023-08-08T18:49:22","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/morgan-stanley-warns-of-hit-to-equity-valuation-if-us-fiscal-spending-is-cut\/"},"modified":"2023-08-08T14:49:24","modified_gmt":"2023-08-08T18:49:24","slug":"morgan-stanley-warns-of-hit-to-equity-valuation-if-us-fiscal-spending-is-cut","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=45996","title":{"rendered":"Morgan Stanley warns of hit to equity valuation if US fiscal spending is cut"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: A sign is displayed on the Morgan Stanley building in New York U.S., July 16, 2018. REUTERS\/Lucas Jackson\/File Photo<\/span>
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(Reuters) – Brokerage Morgan Stanley <\/span><\/span> (NYSE:) on Monday warned that lofty U.S. equity valuations could be questioned by investors if aggressive fiscal spending is curtailed after the downgrade of sovereign debt by ratings agency Fitch last week. <\/p>\n

MS equity strategist Michael J Wilson noted that massive fiscal stimulus, prompted by the COVID-19 pandemic since its outbreak in 2020, allowed the U.S. economy to grow faster than forecast. <\/p>\n

This resilience in the face of rapid interest rate hike by the U.S. Federal Reserve has seen some Wall Street strategists chalking in a continued rally for some U.S. stocks. <\/p>\n

The has already gained 17.2% so far this year, thanks to a handful of technology stocks that have ridden AI prospects high. <\/p>\n

While aggressive fiscal spending could continue, given the debt ceiling has been raised, fiscal policy has limits as deficits would widen – one of the reasons for Fitch’s downgrade. <\/p>\n

As bonds – which fund the government’s spending – sold off last week, there are bound to be repercussions. [US\/] <\/p>\n

“Investors will to call into question equity valuations, which were already high before the recent rise in yields,” Wilson said in a weekend note. <\/p>\n

“If fiscal spending must be curtailed due to higher political or funding costs, the unfinished earnings decline that began last year is more likely to resume.” <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: A sign is displayed on the Morgan Stanley building in New York U.S., July 16, 2018. REUTERS\/Lucas Jackson\/File Photo (Reuters) – Brokerage Morgan Stanley (NYSE:) on Monday warned that lofty U.S. equity valuations could be questioned by investors if aggressive fiscal spending is curtailed after the downgrade of sovereign debt by […]<\/p>\n","protected":false},"author":1,"featured_media":800,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-45996","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nMorgan Stanley warns of hit to equity valuation if US fiscal spending is cut | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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