Welcome to Thoughts in the Market.

I'm Andrew Sheetz, Chief Cross-Asset Stragist for Morgan Stanley.

Along with my colleagues, bringing you a variety of perspectives, I'll be talking about

trends across the global investment landscape and how we put those ideas together.

It's Friday, August 13th at 4pm in London.

Obvious things can still matter.

Across a number of metrics, this is an unusually good moment to borrow money.

And while the idea that interest rates are low is also something we heard a lot about

over the prior decade, today we're seeing borrowing cost, ability, and need align in a

pretty unique way.

For investors, it supports equities over credit and caution on government bonds.

Let's start with those borrowing costs, which are pretty easy.

Corporate bond yields in Europe are at all time lows, while US companies haven't been

able to borrow this cheaply since the early 1950s.

Mortgage rates from the US to the Netherlands are at historic lows, and it's a similar story

of cheap funding for government bonds.

But even more important is the fact that these costs are low relative to growth in inflation.

If you borrow to pay for an asset like equipment or infrastructure or a house, its value

is probably going to be tied to the price levels and strength of the overall economy.

This is why deflation and weak growth can be self-fulfilling.

If the value of things falls every year, you should never borrow to buy anything, leading

to less lending activity and even more deflationary pressure.

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