Welcome to Thoughts on the market.

I'm Adrian Sheets, Chief Cross Asset Strategy for Morgan Stanley.

Along with my colleagues bring 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 Thursday, January 14th at 2 p.m. in London.

At Morgan Stanley, we think global growth and inflation will exceed expectations this year.

As a result, we think interest rates will keep rising.

But there's an old saying, be careful what you wish for.

Following the surprise election results in Georgia, which opened the door for more aggressive

financial support from Washington, market expectations

for interest rates and inflation are moving higher. And investors are starting to worry. Will this be the

dynamic that finally upends markets.

Like many things in life, the answer isn't black and white.

In isolation, much higher rates of inflation or much higher interest rates

would be disruptive to how the market sees the present value of a given business.

But there's some important caveats, reasons why we think these developments are more likely to drive a shift in market leadership than a large adjustment overall.

One of these caveats is what we see in historical performance.

When interest rates and inflation expectations are rising together,

equity and credit markets actually tend to do quite well.

The reason, I'd argue, is pretty straightforward.

Interest rates and inflation expectations

rise together when people are getting more optimistic about the economy. Stocks

...