Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
‘Be Careful What You Wish For,’ Mike Wilson Warns. Again.
"Be careful what you wish for," Morgan Stanley's Mike Wilson warned, "way" back in August. He reiterated that warning this week.
It's a reference to slower inflation, which most investors view as a kind of cure-all tonic for everything that's ailed markets for the past 12 or so months.
While it's certainly true that decelerating consumer price growth is a prerequisite for a return to the kind of benign macro-policy conjuncture that lulled (too) many market participants to sleep over the past t
Mike Wilson, one of the few who understands the power of operating leverage. Thanks for this great post.
With all the high fixed cost industries in our economy, including all hospitality, health care, utilities, manufacturing and more, small changes in volume/revenue will result in large changes in profits. Downward is magnified with operating leverage. Doesn’t seem all the rose-colored glasses forecasters get that problem.
Good point by Wilson.
Could offset some of this by tilting toward US companies w/ FX exposure.
Thanks for highlighting this Walt!
The cure? Higher labor and capital productivity. That translates to fading employment, lower capital spending and lower interest rates. It’s coming, but not right away.
With regard to “higher labor productivity”, all “at home” workers should be prepared for the call to return to the office!