A truck moves a shipping container at Qingdao Port on January 14, 2019 in Qingdao, Shandong Province of China.
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Morgan Stanley downgraded its global stocks on fears that slowing GDP growth around the world will offset central banks support.
Chief cross-asset strategist Andrew Sheets told clients in a note that despite Wall Street’s confidence in a more accommodating Federal Reserve, investors haven’t fully appreciated the odds of weaker economic growth in the months to come.
“Over recent weeks, you’ve heard us discussing why we think investors should fade the optimism from the recent G20,” Sheets wrote in the July 7 note. “Why we think bad data should be feared rather than cheered because it will bring more central bank easing. Why we think the market is too optimistic on 2019 earnings and is underestimating the pressure from inventories, labour costs and trade uncertainty.”
“The time has come to put our money where our mouth is,” he said. “The positives of easier…