Welcome to Thoughts on the Market.

I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity Strategist for Morgan

Stanley.

Along with my colleagues bring you a variety of perspectives.

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

It's Monday, March 22nd, at 11.30 a.m. in New York, so let's get after it.

At this point, our V-shape recovery has become the consensus view.

Beyond the fact that global economy is already back to pre-pandemic levels of output, the

combination of effective vaccines and record amounts of fiscal stimulus in the United States

have essentially guaranteed a sustainable recovery from recession.

As a result, we now find economists and strategists arguing that they have the most optimistic

forecast.

While the trend is typically your friend and the consensus tends to be right about 80 percent

of the time, it's probably not a bad idea to start asking how the consensus could be

wrong.

From our vantage point, there are several short-term blind spots and a bigger long-term

consequence for the cycle.

Based on the short-term, long-term interest rates have finally started to reflect this

very strong economic rebound.

This is having a negative impact on valuations for equities, especially the most egregiously

priced ones that have benefited the most from persistently lower rates.

Meanwhile, the Fed has shown little interest in stopping this move higher and longer-term

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