Wall Street investment bank Morgan Stanley (MS) says U.S. stocks are likely to outperform international rivals over the long-term despite the volatility caused by the war in Iran.
Mike Wilson, the chief stock-market strategist at Morgan Stanley, says that America’s outperformance could continue despite the current market gyrations caused by crude oil rising above $100 U.S. per barrel.
Wilson adds that the U.S. market has been working through a “rolling recession” for months.
“Indices have traded sideways, but dispersion has been historically high under the surface,” he writes in a note to clients.
The lead analyst adds that cyclical sectors and quality growth stocks are starting to look more attractive from a positioning and valuation perspective and still have fundamental tailwinds.
Wilson also notes that earnings growth for the median U.S. company has been the best in four years, and that mega-cap technology companies’ forward revenue growth expectations continue to accelerate.
Looking ahead, Wilson sees U.S. equities continuing to run ahead of stocks in Europe and Asia, where the current selloff caused by an oil shock has been more pronounced.
Lastly, Wilson notes the rebound in the U.S. dollar as a safe haven asset with war and geopolitical turmoil raging around the world.
MS stock has declined 12% this year to trade at $160.27 U.S. per share.
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