Welcome to Thoughts on the market.

I'm Andrew Sheets, Chief Cross Asset Strategy

from 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. Though I'm typically coming to you from Morgan Stanley's

London headquarters, today, like many of our listeners, I'm working from home. Hence, this may sound a little bit different. It's Thursday, March 19th at 8 PM in London.

We think risk reward is gradually improving. That's not because we're sure the sell-off is over.

It may not be. It's not because the risk to growth or

public health aren't serious. They're very serious and indeed our economists have

recently updated their forecasts and are now expecting a recession both in the US and around the world.

Rather, we're becoming a little bit more optimistic because a number of things in our checklist are starting to get checked off.

First is valuations, which were unusually expensive going

into this decline but are rapidly moving to recession-like levels.

Stock markets have fallen 30% in the United States, 40% in Germany, and 55% in Germany and 55% in Brazil. In the span of just two months,

corporate credit spreads have moved from some of their richest levels in the

last decade to their cheapest.

Next is Central Bank Policy, which after a slow start is starting to respond much more aggressively.

When the Federal Reserve made an emergency rate cut several weeks ago,

we noted we were concerned that the lower

interest rates wouldn't have much of an impact on the current crisis. But since

...