Welcome to Thoughts on the market. I'm Andrew Sheets, Chief Cross Asset

Strategist for Morgan Stanley. Along with my colleagues bringing a variety of

perspectives, I'll be talking about trends across the global investment landscape and how we put those different ideas together.

It's Friday, July 5th, at 2 p.m. in London.

Every day, investors wake up to the price of thousands of securities across all corners of the globe. Those

thousands of prices are set by thousands upon thousands of individuals.

There's no grand plan to set prices at the start of a trading day, no meeting among

every market participant to decide where currencies, interest rates, stock prices and everything else should trade.

And yet, every day these prices are set in a way that at the time seems reasonable.

Reasonable enough where financial reporters can

generally find a story that makes the prices consistent with each other.

Reasonable enough that profiting from misprice securities, the best definition

we can think of for successful investing is hard to do on a consistent basis.

Why do we bring this up? Every day the market sets prices. Every day these prices tell a story of expectations.

And at the current moment moment we think that story is

particularly interesting. Let's start with the Federal Reserve.

Market pricing implies that the Fed will lower interest rates by a full percentage

point between now and the end of 2020.

But after that, expected deals pick up again.

The way to explain that, the Fed gets things just right, cutting rates

just enough to get growth to eventually pick back up so it can begin raising rates again.

But if growth is expected to pick back up on the back of Central Bank action, it looks like a very fine line.

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