Welcome to the

thoughts on the market.

I'm Andrew Sheets, Chief Cross Asset Strategy

for Morgan Stanley.

Along with my colleagues providing 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, February 7th at 2 p.m. in London. Supply and

demand are essential building blocks and economics and they matter for investing as well.

Every asset has a level of supply for which a price needs to be found that causes demand to clear.

In bond markets, it's the amount of new bonds coming to the market less those that mature.

In stock markets, it's the amount of new shares being issued by new and existing companies

relative to what is bought back by those companies.

Just like in economics, less supply means higher prices and more

supply should mean lower prices, all else equal. Well this is just one of many

drivers of how markets perform. How does supply look across asset classes in 2020? It looks better, i.e. lower in equities than fixed income,

and it looks better in U.S. European and Japanese equities relative to emerging markets.

Looking across all global bond markets that Morgan Stanley covers,

we estimate that about 9.2 trillion worth of new debt will be issued this year

versus about 6.7 trillion coming due.

That difference is a net issuance of about 2.5 trillion of new debt that needs to find a home.

And while that's slightly lower than that number last year, it is still a very large figure overall.

...