2025-03-25
4 分钟Welcome to Thoughts on the Market.
I'm Mike Wilson, Morgan Stanley, CIO, and Chief U.S. Equity Strategist.
Today on the podcast, I'll be discussing the recent rally in stocks and why it can continue.
It's Monday, March 24th at 11.30 a.m. in New York, so let's get after it.
Last week's Fed meeting appeared to come as a relief to many market participants,
as Chair Powell seemed to downplay concerns about inflation,
offering a bit more emphasis on the gross side of the Fed's mandate.
The Fed also made a decision to slow the pace of balance sheet runoff,
a development that came sooner than some expected and indicated the Fed is ready to act if necessary.
Looking ahead, investors are now very focused on the April 2nd Reciprocal Tariff deadline.
While this catalyst could offer some incremental clarity on tariff rates in countries and products and scope,
we think it's more a starting point for tariff negotiations as opposed to a clearing event.
In short, a Fed put seems closer to being in the money than a Trump put,
though it probably would require material labor weakness or choppier credit in funding markets.
So far, doge firings have had little impact on data like jobless claims or the overall unemployment rate.
There may also be a lag between when employees are laid off and when these individuals show up as unemployed,
given that severance is offered to most.
The more important question for labor markets is whether the recent decline in the stock market,
fallen confidence, and rise in economic trade uncertainty will lead to layoffs in the private economy.
Our economist-based case assumes that these factors won't drive an unemployment cycle this year,