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

Officer and Chief U.S. Equity Strategist for Morgan Stanley.

Along with my colleagues bringing a variety of perspectives, I'll be talking

about the latest trends in the financial marketplace.

It's Tuesday, January 19th at 9.30 a.m. in New York, so let's get after it.

After an incredible year for stocks in 20, it looks like 2021 is starting off right where things left off.

Excess liquidity is driving equity prices higher, but the broadening out and rotation to new leadership

has been the most important thing for investors to get right.

The good news is that this lines up with our key call since March of last year, more specifically

to buy small caps and economically sensitive stocks rather than the high quality big cap

secular growers known as fang.

The primary driver of this bull market and rotation in new leadership has been the policy response

to the pandemic, both monetary and fiscal.

This is what led to the V-shaped recovery in our economy from the depths of the deepest

recession on record. Last week we got another boost to our thesis when President-elect

Joe Biden announced a new $1.9 dollar COVID relief package.

To be clear, this proposal is in addition to the $900 billion package that was just

passed last month.

While we don't know how much of this new proposal will make it through Congress, we are

confident it should be well over $1 trillion when all

is said and done.

To put this into context, if we combine the $900 billion bill already passed and assume another

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