Welcome to Thoughts on the Market.

I'm Mike Wilson, Chief Investment Officer and Chief Uosequity Strategist 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, February 8th at 11.30 a.m. in New York, so let's get after it.

While January was a volatile month for stocks with little returns at the index level, there

were some big winners and losers.

If history is a guy, this may be a good roadmap for 2021.

Shortly speaking, as goes January, so goes the year.

A more volatile market with a wider dispersion of returns among individual stocks is also

typical of where we are in the economic recovery.

With consensus on board with our V-shape recovery and cyclical bull market in the context

of a new economic cycle, investors should be on the lookout for how we could be surprised.

First, while we were early with our V-shape recovery narrative, we must admit it's been

even stronger than we expected nine months ago.

Much of this has to do with the enormous stimulus provided by the Fed and Congress, which

has led to a recovery in retail sales and other forms of consumption.

Second, the advent of a new risk-seeking retail investor with easier and cheap access to

markets has become the marginal buyer of stocks, which is also added to the market volatility.

Finally, the development of multiple vaccines faster than most expected has increased investor

confidence in both the recovery and higher stock prices.

Perhaps most important is the rapid recovery in earnings we are now seeing in the fourth

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