Morgan Stanley IM: Old Risks Create New Challenges
Jim Caron, Co-Lead Global Portfolio Manager and Co-Chief Investment Officer, Global Balanced Risk Control Team, shares his macro thematic views on key market drivers.31.03.2023 | 07:58 Uhr
- The market environment today is filled with negative sentiment, where the consensus now calls for a recession in 2023.
- But, we have to distinguish whether the slowdown was scripted - and thus expected - by central banks, or if something more nefarious is at hand.
- Recession risks, however mild, have certainly increased and are largely already in market prices, but the risk of a hard landing has also increased.
- Commercial real estate exposures at smaller banks, deposit ratios, increased costs of credit and other unknowns have recently become risk factors.
- But wait, weren't those risk factors there all along? And if not top of mind a few weeks ago, then why are they in the spotlight today?
- There are also risk factors centered on reduced lending by smaller banks, risks that are difficult to observe and therefore difficult to measure.