Welcome and 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, January 6th at 9 a.m. Eastern, so let's get after it.

Welcome to 2020 and welcome to a new decade.

While the start of a new decade, conjure up thoughts of big changes,

it's unlikely we see many in the near term for markets

that have been dominated by financial repression for the last 10 years.

More specifically as we enter

2020 market participants find themselves paying higher prices for

everything, especially high quality income or growth securities. More

specifically stocks are trading at some of the highest valuations in a decade, while interest

rates and credit spreads are near their lowest level in history.

At this point, everyone understands that 2019 was a year of disappointing growth offset by monetary policy

by central bankers around the world. Cutting interest rates is a fairly normal

policy action when growth is slowing. However quantitative easing is an aggressive policy typically reserved for times of crisis.

With unemployment at the lowest in 50 years and inflation close to 2%, we are far from a crisis

or even a recession.

So why has the Fed expanded its balance sheet

by close to $400 billion since September

with plans to expand it even further

over the next three to four months?

...