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

It's Monday, April 6th at 1230 p.m. Eastern. Let's get after it. At this point, everyone

understands we are now in a recession and that it will likely be the steepest

recession any of us have ever experienced. As market strategists we have to understand that

asset prices reflect the obvious before it's obvious.

So the question now is, what is the market thinking about that's not obvious?

Well, this is a difficult exercise.

We must stretch our minds at times like this when things appear so one-sided.

Rarely have we witnessed positioning, sentiment, and valuation so extreme.

Could things get worse from here economically? Of course.

Could health concerns about the coronavirus deteriorate further? It's possible.

However, there are other things the market may be beginning to think about that aren't so obvious,

the most notable being inflation.

First, while the policy response to the recession from the Fed and Congress has been extraordinary,

it's also different in its composition from what we've experienced in the past.

The size of the QE program this time is running at a pace

that's three times as great as what we got

after the financial crisis.

This time they are going all in from the get-go

...