Welcome to thoughts on the market. I'm Mike Wilson, Chief Investment Officer and Chief

U.S. Equity Strategies for Morgan Stanley. Along with my colleagues bringing you a variety

of perspectives, I'll be talking about the latest trends in the financial marketplace.

It's Monday, December 7th at 11.30 a.m. in New York, so let's get after it.

As we enter the home stretch for 2020, it's difficult not to have mixed feelings about this year.

On a personal level, it's been a year of tremendous uncertainty and stress for just about everyone.

However, from an investment perspective, 2020 has been an extraordinarily good year for just about every asset class.

Bond, stocks, real estate, and even some commodities have inflated to new highs at a time when our lives and the economy are stuck on hold.

Add into that mix one of the most hotly contested elections in history and emotions are pretty

freight at this point.

Most of my recent conversations with clients suggest people are exhausted and looking forward to closing

the books on 2020.

But we still have three weeks to go and most professional asset managers can't simply shut it down before the end of the year, even if they'd like to.

In addition to most stock indices at all-time highs, most of our micro themes for the year have played out too.

For example, small caps have outperformed large casts by close to 20% since early April,

while economically sensitive stocks have outperformed defensive ones by close to 65%.

In short, we just don't see that many great opportunities left

as the market looks as exhausted as people currently feel.

Our recommendation at this point in the recovery

is to step back and take a deep breath.

When markets get this extended and over-bought,

they inevitably correct and consolidate.

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