Thoughts on the Market

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  The Mid-Cycle Shift Equity Investors Shouldn’t Miss 15.09.2026 5min

  Our CIO and Chief U.S. Equity Strategist Mike Wilson breaks down how the market is transitioning to a mid-cycle environment, with leadership shifting toward higher-quality, asset-light companies with durable earnings.Read more insights from Morgan Stanley.----- Transcript -----Mike Wilson: Welcome to Thoughts on the Market. I'm Mike Wilson, Morgan Stanley’s CIO and Chief U.S. Equity Strategist. Today on the podcast I’ll be discussing why inflation should not be a concern for equity investors.It's Tuesday, September 15th at 9 am in New York.  So, let’s get after it.The markets have spent the past few months doing far more work than what most casual observers might think. Since early June, the S&P 500 has chopped sideways, but underneath the surface leadership has changed materially. The early-cycle, capital-intensive winners are giving way to higher-quality companies with stronger free cash flow, better margins with more asset-light businesses. Software, Financial Services, Insurance, and Healthcare Services are beginning to show the earnings revision strength that Semiconductors and other cyclicals enjoyed earlier this year. To me, that is the market confirming an economy moving from early to mid-cycle.While many investors are debating yesterday’s news, the market is already moving to new leadership. A good example of this is the inflation data that was released last week. The results were a bit higher than expected and elicited quite a reaction from the media and Fed watchers. However, the probability of a September interest rate hike has been rising for months and was close to 70% before the data were released. Now it’s 95%. Equities have de-rated alongside that repricing in the bond market. In short, the inflation data may have been news to some, but it wasn’t to Mr. Market.While some may view this as the Fed being behind the curve, the bond market has been expecting it for months and essentially doing the tightening for the Fed. Equity markets are well aware of this dynamic which is why valuations have fallen and the index has gone nowhere for the past few months. This is also classic mid cycle transition behavior—strong earnings growth is offset by falling valuations as the Fed starts to focus on its inflation mandate. In other words, the first hike does not mean “risk off.” However, it does reinforce the quality rotation and overall narrative we have been highlighting since June. And earnings are the reason. To remind regular listeners, the median Russell 3000 company is growing earnings in the mid-teens, the fastest since 2021; and revisions remain strong. That is the mid-cycle playbook to a T—earnings are doing the heavy lifting and the market is becoming more selective, not necessarily less constructive. More specifically, the market is demanding better cash conversion, stronger margins, and more durable growth.This is why the momentum unwind earlier this summer has been misunderstood. Some investors see it as nothing more than leverage coming out of crowded positions, but that really misses the bigger message. Semiconductors are a classic early cycle sector and it reached an extreme in earnings revisions breadth back in June. That was the fundamental trigger for the unwind, and the leverage just magnified it. The price momentum factor can recover, but the stocks and sectors that lead may look very different. That is usually how a healthy market adjusts: the baton gets passed before everyone realizes the race has changed.With regard to interest rates, I also think the mainstream explanation is incomplete. Many investors assume higher yields are simply a referendum on debt and deficits. I see stronger nominal growth as the more important driver. Nominal GDP is running close to 7% on a five-year average basis and has reaccelerated on capex incentives, compute demand, and higher velocity real economy. Equities are an inflation hedge when inflation reflects stronger revenue and earnings growth. Deflation—not inflation—is the real kryptonite for stocks.This does not mean we are completely out of the woods on the mid cycle transition that began in June. If oil continues to rise sharply from here, it will likely push interest rates higher and put pressure on growth, an unhealthy combination for stocks. This would likely lead to a 5-10% drawdown in the S&P 500 before the bull market can resume in earnest. The other risk is the midterm elections which historically have been a headwind for equities in the September and October time frame.  Bottom line, the inflation data is old news. The rotation is not. We are transitioning to a mid-cycle market where earnings durability, free cash flow, operational efficiency, and quality matter more. Investors waiting for complete clarity from the Fed may miss the message already coming from the market: leadership has moved to higher quality, asset light companies. Don’t fight it; embrace it. Thanks for tuning in; I hope you found it informative and useful. Let us know what you think by leaving us a review. And if you find Thoughts on the Market worthwhile, tell a friend or colleague to try it out.
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  Patients Are Taking the Driver's Seat in Healthcare 14.09.2026 8min

  Healthcare companies are rethinking their business models as patients gain more control over how they access care and purchase medicine. Our analysts Erin Wright and Terence Flynn unpack this shift and the emerging opportunities.Read more insights from Morgan Stanley.----- Transcript -----Erin Wright: Welcome to Thoughts on the Market. I'm Erin Wright, US Healthcare Services Analyst at Morgan Stanley.Terence Flynn: And I'm Terence Flynn, Morgan Stanley's US BioPharma Analyst.Erin Wright: Today, how the consumer is moving into the driver's seat across healthcare.It's Monday, September 14th at 7:00 AMWe're recording in New York City, where Morgan Stanley's twenty-fourth Annual Healthcare Conference is happening this week. One of the biggest shifts we're seeing across the industry is patients gaining more choice, transparency, and control over how they access care and medicine. You can already see it in everyday behavior. In our AlphaWise survey earlier this year, thirty-four percent of US consumers said that they'd chosen to take a voluntary wellness lab test in the past three years, and roughly two-thirds already own a wearable or plan to buy one.And now we're seeing the same trend reshaping how people buy medicine and choose care. So Terence, let's start with biopharma. For years, direct-to-consumer pharma meant advertising and nudging people to ask your doctor about what particular treatment is best for them. What's different this time around? And what's different in this next wave of direct access?Terence Flynn: Yeah, absolutely. Thanks, Erin. So for most of the industry's history, the patient sat at the end of the value chain and had really limited control over the product, the price, or the route through which the drug was obtained.Manufacturers marketed to doctors and consumers, but the transaction was itself intermediated. So we think that's starting to change here. It's no longer simply about more consumer advertising or another cash pay discount. There's a parallel access infrastructure that's building here where the patient can increasingly start the initiation of the treatment journey themselves, obtain a prescription, often digitally through a telehealth provider, and then fill this prescription through other non-traditional channels.And so there really is a shift in the model that we're starting to see here. But again, we're not talking about replacing insurance here; we're talking about areas where friction is high and where a cash pay price is viable.Erin Wright: So Obesity has been the clearest proof point, as we are seeing patients asking providers about GLP-1s. Where else are we seeing this?Terence Flynn: Yeah. So manufacturers are actually already selling over twenty-five branded drugs directly to patients at cash prices. Now, the common features of these drug classes are that they're self-administered, so essentially the patient can start and stay on treatment, and where there's limited in-person infrastructure that's needed, and where, as I mentioned, you have a lower price point or a coverage gap, meaning traditional insurance coverage doesn't exist.Now, we're seeing this in large chronic categories. You mentioned obesity. Another one is, migraine headaches. There are also other areas that are amenable to telehealth, so think oral PCSK9 therapies, topical dermatology, non-opioid pain. So again, we think as more self-administered products launch, you're gonna see the addressable DTC pool expand.Erin Wright: And ultimately what does this reveal about patient demand and gaps in reimbursement?Terence Flynn: Yeah, I think GLP-1s, as you mentioned, Erin, provided the first proof point here that this new DTC model could actually be viable. And really the reason for that is that, the US employer coverage base right now, only about fifty percent cover these obesity medications.And so for the other fifty percent, you have a gap in coverage. And that's really why people are seeking other channels for coverage. And so again, that really created this opening here for this new model. And so again, that's another consideration when you think about other medicines that could go through these channels is you have to think about the insurance coverage situation. And so for some areas like oncology, for example, insurance coverage is gonna be very high, and so those wouldn't be amenable to a DTC approach.Erin Wright: So Terence, your analysis points to roughly twenty-six billion peak US opportunity. What makes a certain therapeutic well-suited for direct-to-consumer, and where is the opportunity most concentrated?Terence Flynn: Yeah. So there are really four variables that we considered. The first is self-administration. So as I mentioned, you have to be able to administer the medicine yourself, meaning you don't have to go into the physician or hospital for an injection, for example. The second is that the diagnosis doesn't need an in-person confirmation. So think of something like a biopsy or something. So you'd have to be able to diagnose, as I said, over a remote telehealth channel. The third would be something that is a lower price point. Obviously, there are, like we mentioned, the GLP-1 medicines are at a different price point versus oncology medicines.And then the last one would be any kind of legal restrictions. So sometimes FDA has a lot of restrictions around who can prescribe a medicine. These are called REMS. And so any medicine that had restrictions like that obviously would not be amenable to DTC. So again, we think through those different variables, and then we ultimately built up this twenty-six billion dollar TAM that represents about three percent of total branded pharmaceutical spend. Of that, about half is driven by the obesity or GLP-1 medications.So Erin, that's a good bridge to healthcare services because consumerism isn't just about paying cash. What does greater consumer control actually look like?Erin Wright: You're right. It's not just about paying out of pocket for healthcare. With now consumers becoming more proactive with their healthcare and preventative care, we are seeing a whole healthcare ecosystem shift, from health insurers now offering lifestyle savings accounts empowering patients with more choice on that front, health systems and hospitals are creating a digital front door and delivery of care twenty-four/seven on that front. And also, we're seeing more direct-to-consumer pharmacies and transparent pharmacies that are gaining traction.Terence Flynn: And what does the Alpha Wise survey data tell us about consumers' willingness to pay out of pocket for care?Erin Wright: So based on our AlphaWise consumer survey, twenty-five percent of consumers report paying entirely out of pocket for at least one healthcare service over the past year. That was actually higher than what we were expecting. Most commonly, this was attributable to behavioral and mental health services, about eight percent of the cohort.Annual spend was about nine hundred and eight dollars, but maximum willingness to spend was about double that. So this suggests consumers are using out-of-pocket services and medications and are willing to spend to do so.Terence Flynn: That's very interesting. How important are digital tools, wearables, and testing in actually accelerating this shift?Erin Wright: So wearables are certainly a piece of the puzzle. What is new though here is that we're seeing wearable data align with actual biological data, where, for example, clinical laboratories are now partnering with these wearable companies and other direct-to-consumer healthcare platforms to offer subscription-based biomarker panels and other testing services. This is where this type of technology becomes more actionable from a healthcare perspective and really, frankly, empowers patients to take matters into their own hands.Terence Flynn: So as consumers take more control, as you discussed, what types of healthcare service models are best positioned to benefit?Erin Wright: There are certainly a host of companies across healthcare that are attacking this from several different angles.But if we think about who in the industry has the most touch points into the consumer, into the patient, it would be your diversified managed care companies and vertically integrated managed care companies where we view that many of these larger insurers are best able to adapt to consumerism in healthcare. We're already starting to see that happen with stepped-up technology investments helping to facilitate greater transparency and access, whether it's across insurance, provider arms, technology, or, um, or pharmacy assets as well.To sum it up, in biopharma, we're seeing a parallel access channel emerge alongside traditional reimbursement. And in healthcare services, consumers are gaining more control over how they choose access and pay for their care. Consumers aren't stepping outside of the healthcare system. They're taking a more proactive and more active role in how they navigate it.Terrence, thank you for taking the time to talk.Terence Flynn: Great speaking with you Erin.Erin Wright: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or a colleague today.
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  Why the Middle-Class Squeeze Is Getting Worse 11.09.2026 11min

  Heather Berger of the U.S. Economics Team hosts Wealth Management Senior Economist and Strategist Sarah Wolfe to discuss what it takes to define the middle class in America today. They break down how factors like rising essential costs and the development of AI are reshaping consumer balance sheets and financial security.Sarah Wolfe is a member of Morgan Stanley's Wealth Management Division and is not a member of Morgan Stanley’s Research Department. Unless otherwise indicated, her views are her own and may differ from the views of the Morgan Stanley Research Department and from the views of others within Morgan Stanley.Read more insights from Morgan Stanley.----- Transcript -----Heather Berger: Welcome to Thoughts on the Market. I'm Heather Berger from Morgan Stanley's U.S. Economics Team.Sarah Wolfe: And I'm Sarah Wolfe, Senior Economist and Strategist on Morgan Stanley's Thematic and Macro Investing team in the Global Investment Office.Heather Berger: Today, the K-shaped economy, the middle class, and how AI could reshape both.It's Friday, September 11th, at 10a.m. in New York.The K-shaped economy has been a major theme this year. At its core, it describes an economy where households are experiencing very different circumstances. Those with more assets have benefited from rising wealth, while those with less wealth remain more dependent on income and more exposed to increases in essential costs. But that top versus bottom framing can miss an important part of the story: the middle class. Sarah, you recently wrote about what it takes to make it to the middle class in America. How would you define the middle class today, and how does that differ from the way that households define it themselves?Sarah Wolfe: I think the important thing here is that economists and households define the middle class very differently from each other, and, and I'll get into why that's the case.So if you're an economist, the middle class is roughly defined as two-thirds to twice the median household income, which today means if you're making around fifty-five thousand dollars a year to a hundred and sixty-eight thousand dollars a year, depending on where you live in the country, that is roughly the middle class. And that's where about half of Americans sit today.We've actually seen that number decline, so sixty-one percent of Americans in the 1970s were in that middle class definition by economist terms. Now it's about fifty percent, so we have seen it shrunk. But even though it's shrunk, fewer and fewer households feel like they're in the middle class, and they don't define it by necessarily income or a specific number, but they really define it by milestones, I would say.So do you own a home? Have you been able to build a family, and can you pay for childcare? Have you saved enough for retirement? Do you have an emergency fund? Are you constantly stressed about your bills? That feeling is really what the middle class is about today, and I would say that less than fifty percent of Americans actually feel like they're in the middle class once you start to put that definition around it.Heather Berger: What are the key factors that actually make a household feel financially secure?Sarah Wolfe: I think there's four things that determine household security and stability. The first, of course, is income, stable income. Do you have a job, and do you think you're going to continue to have a job six months from now? We love the University of Michigan Consumer Sentiment survey that asks consumers this.Do you have affordable fixed costs, like housing, childcare, healthcare, and transportation? Do you own assets? This is critically important because if we look at where gains have come from from the last five years, it hasn't really been that much through the labor income channel. It's been through the asset channel, like home equity, retirement savings, are you invested in the stock market, et cetera.And then the last one is this emergency fund and a manageable debt. What is your debt load? Is it fixed rate, or is it revolving? The more of these pillars that a household has, the more financially fulfilled and comfortable they are, and the more likely they are to feel like they've made it to the middle class, but the reality is, is that fewer and fewer households are meeting these four boxes that define the middle class by historical terms.Heather Berger: And what has made that security harder to achieve? Which of those costs that you mentioned have moved the furthest out of reach?Sarah Wolfe: I think these numbers are going to maybe surprise our listeners, but in some ways feel very real to them as well. So if we look at how much inflation has risen since the 1970s, shelter, the cost of housing, has risen 6.6 times more than the overall inflation basket. Childcare costs have risen by 14 times more than the overall inflation basket, and healthcare costs have risen 10 times more.And if we dig more into childcare, we now like to call it the second mortgage. And we're not being sarcastic or anything. The reality is that to send two children to childcare in America costs more than a mortgage in 45 states, and costs more than rent in 49 states.So it's really, this reality has gotten a lot more expensive, and these baskets, these individual things like childcare, healthcare, shelter, that define the middle class, have risen more than the overall inflation basket, and certainly have risen more than income growth over this period as well.Heather Berger: Right. So the overall inflation measure can kind of understate the increases in some of these essential costs. And when people talk about a K-shaped economy, the middle class itself isn't necessarily moving as one group. You mentioned homeownership a lot. How much do homeownership, age, and geography determine who is moving up and who is getting squeezed?Sarah Wolfe: Homeownership is always incredibly important, right? Because it's this large asset that is more equally distributed across the income distribution, as opposed to if we think about equities, and you've done a lot of great work on this. That is the most highly concentrated asset across the income distribution, right? Where the top 20% is sitting on 70%, at least, of equities. So homeownership remains the best channel towards wealth accumulation. Obviously, though, timing of homeownership matters a lot. If we were all so lucky to have bought a home in 2019 and 2020, we got a low fixed-rate mortgage, and we would've benefited from the tremendous run-up in home prices over the last five years, right, over 50% home price appreciation over this entire period. So that's been really important. Also, geography, where you bought a home, did that benefit from the COVID home price appreciation? And then the geography also matters because someone living in New York versus someone living in the Midwest is living with really different fixed costs, realities of fixed costs, and that's also gonna help define do they feel financially secure, and do they feel like they're in the middle class?The other component I don't wanna leave out, though, equities is really important. And we did some work looking at the Fed's distributional financial accounts, and if you look seven years ago, Gen X was doing way better than Gen Y or the millennials were at that same age 15 years ago. But then, because the millennials were sitting on so much equity wealth because they've built up their 401Ks, they really couldn't get as successfully into homeownership, so they had more stored away in equities. They have now surpassed Gen X at this age, two and a half times. It is a tremendous reversal in wealth and in who's doing well, and it's because of what's happened in the stock market. And it's not because they were better savers. It was just a lot of timing and luck. So I would say that our fate is not prewritten, as we also think about Gen Z entering the workforce and becoming wealth builders.I want to dig in, though, to a really important part of the K-shaped economy, though, and that's AI. We can't talk about anything without talking about AI, for better or for worse. And that the common view is that white collar, high-income workers are the most exposed to displacement, and we're seeing that in some of the job numbers recently, right, where tech and financial services are shedding jobs. But your work, I think, is really unique, and it's the only thing I've seen on this that argues that that's only part of the story. So what are we missing about how AI is going to affect high-income households in the K-shaped economy?Heather Berger: Yes. Yeah, I think it's hard to talk about the economic outlook, the consumer outlook these days without thinking about AI. And as you mentioned, I think really the main focus so far has been potential white collar job loss, and this, of course, is an important channel. Labor income is really the main driver of consumer spending. But there are also several other transmission channels through which AI will affect consumer balance sheets.And so ultimately, you were just talking about equity wealth, AI will also affect asset markets, which we've already started to see. It will affect consumer prices and policy decisions, and each of these will flow through to consumer spending and consumer credit performance. And so since different subgroups of consumers differ in the types of goods and services they buy and the composition of their balance sheets, the effects will not be uniform across the spectrum.As we've seen with past innovation waves, AI has the ability to potentially widen income and wealth inequality, or it could help to close the gaps.Sarah Wolfe: Can you dig a little bit more into some of these other channels outside of the labor market? So what is the wealth channel, and how does it filter through to high-income households? And then what also is the inflation channel that we should be looking at?Heather Berger: Sure. So the wealth channel is really important for high income consumers because they have equity wealth that is very elevated relative to their labor income. So for that top twenty percent cohort, their equity wealth is around six times their annual labor income. Whereas for the lower income groups, they're about in line with each other.And so even if the marginal propensity to consume out of income is higher than that out of wealth, for this high income group, asset markets are still a really important driver of spending. Now, for lower income groups and really across the spectrum, of course, inflation will be important as well and will really help determine purchasing power.When we think about the price channel, we're really thinking in two phases. The first is that in the near term, AI could potentially create price pressures. So if we look at areas like electricity and software, we've already started to see that the demand from AI has led to increases in these prices. But over the longer term, we are expecting that eventually AI will lead to productivity gains, and therefore could lead to disinflation.Sarah Wolfe: In which categories are we expected to see disinflation, and who does that benefit?Heather Berger: So we're really first expecting to see it in the industries that have higher adoption rates. And so far those have been industries like financial services, tech. And so if we think about these services categories of spending, they really make up larger shares for the high income group, the older group. And so we do think they will benefit first from that disinflation channel.Sarah Wolfe: I think if I sum up some of the key takeaways, it seems that the balance sheet is more important than income, and it's going to continue to be so. If you look at the top 1% wealth percentile, they're holding 70 times more wealth than the median wealth group, and that used to be 33 times in 1963, right? So that gap between those in the middle versus those at the top has widened, and this dynamic with AI is only probably going to continue to widen that gap, making people feel less and less secure about their finances, making it feel harder to be in the middle class, and in particular, making it feel unattainable to reach the next class, right, because that gap is so large. And so we'll be watching as a lot of these dynamics play out.Heather Berger: Right. So asset markets will be just as important as labor markets in figuring out how the K-shape economy will evolve.Sarah, thanks for taking the time to talk.Sarah Wolfe: Great speaking with you, Heather.Heather Berger: And thanks for listening. If you enjoy "Thoughts on the Market," please leave us a review wherever you listen and share the podcast with a friend or colleague today.
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  The Fed, Football and the Price of Ambiguity 10.09.2026 5min

  Our Global Head of Fixed Income Research Andrew Sheets discusses when markets may not adequately compensate investors for uncertainty around themes like Fed policy, AI financing and energy supply.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley. Today, what American football can teach us about the value of ambiguity.It's Thursday, September 10th at 2p.m. in London.I really like this time of year. It's a little cooler outside. There's the excitement in the air of a start of a million new school years. And of course, it's finally American football season. Of the top one hundred US television telecasts in 2025, ninety were football games. In an increasingly divided world with an increasingly fragmented ecosystem for content, this unanimity is stunning. And while many factors explain football's popularity, one that I've come to appreciate more with time is its strategic complexity, especially the value of ambiguity.Not tipping whether the play is a run or a pass, disguising whether and where you're going to blitz. Coaches work hard to keep their options open until the last possible moment. And as we enter September, this strategy is not just confined to football.Take the Fed. Markets are pricing a roughly two-thirds chance of a rate hike next week, about the same chance that an NFL team passes on second and seven. Part of that uncertainty comes from exactly how you parse Fed Chair Warsh's comments at Jackson Hole. Chair Warsh said the Fed needs to be confident that underlying inflation is moving towards its objective, “clearly and at sufficient speed.” Otherwise, it has, "work to do." This was generally interpreted as a move closer to raising rates. But was it? What is sufficient speed? What counts as underlying inflation? And what does “work to do” actually mean? After all, if inflation is better in the second half of the year, as our economists expect, this framing could just as easily justify no action. We forecast the Fed to stay on hold next week. It is admittedly a close call.Then there's ambiguity in AI financing. The numbers here are enormous. Morgan Stanley analysts forecast more than 1.3 trillion dollars of spending among the six largest hyperscalers in 2027, a sixty percent increase from the record-setting levels of this year. But how all this gets financed, that's less certain. There's an increasingly rich menu of options for financing across public and private markets, from investment-grade bonds to asset-backed securities, from direct financing to guarantees. The spending seems likely, but what form it takes and how much it impacts other markets is more ambiguous. My colleagues Matthew Hornbach and Vichy Tirupattur discussed some of these ambiguities and their potential effect on Treasury yields earlier this week.Finally, ambiguity clouds the energy market. Some analysts are optimistic that oil flows are finally normalizing in the Strait of Hormuz. We are not. Coupled with major disruptions to Russian refining capacity, we've now raised our fourth quarter forecast to one hundred dollars per barrel for Brent oil and eighty-eight euros per megawatt hour for European natural gas.Across these three themes, some of this ambiguity is intentional. Some simply reflects a wide range of possible outcomes. In football and in markets, keeping your options open can be valuable when you're calling the plays, but it's less attractive when you're being asked to price them. And that, for us, is the issue. There is plenty of uncertainty. We're not sure investors are being paid enough for it. A close call September Fed meeting, adverse seasonality, and very low levels of expected volatility leave us positioned for higher volatility across macro markets and cautious on mortgage-backed securities.In credit, we think all of this issuance is a question of price, not capacity. We continue to expect record investment-grade supply this year with wider spreads as a release valve and prefer collateral-backed assets over unsecured corporates. And with oil a risk to both stocks and bonds, our US equity strategists think that energy equities offer an attractive hedge.Ambiguity has value, but when the range of outcomes is wide and the price of uncertainty is low, we think investors should demand more compensation for it.Thank you, as always, for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today.
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  Can the AI Spending Boom Pay Off? 09.09.2026 5min

  Big Tech is pouring more than $1.4 trillion into AI, prompting investors to ask: Is it worth it? Our U.S. Internet analyst Brian Nowak looks at three business models that could earn 25 to 50 percent returns for Gen-AI-enabled technologies.Read more insights from Morgan Stanley.----- Transcript -----Brian Nowak: Welcome to Thoughts on the Market. I'm Brian Nowak, Morgan Stanley's U.S. Internet analyst.Today, can the enormous investment behind Gen AI actually pay off?It's Wednesday, September 9th, at 9am in New York.AI has moved quickly into everyday life. It helps people write software, research purchases, automate work, find information, among myriad[s] of other use cases.But we need an infrastructure build-out of extraordinary scale to support all of this activity and more activity to come.In all, we estimate that the major cloud providers are going to spend more than $1.4 trillion on this AI build-out next year alone. But compute capacity is potentially going to quadruple from 2025 to 2028, reaching roughly 120 gigawatts.But all of the spending has raised a lot of questions for investors. One of the most common questions is: What kind of return on invested capital can these companies earn from all of these trillions of dollars of data center infrastructure investment?Well, our bottom-up work points to encouraging answers to this question.We see paths to roughly 25 to 50 percent return on invested capital, or ROIC, across three emerging AI business models. Now, ROIC is a useful way of measuring whether investments pay off. Think of it as how much after-tax operating profit can be generated relative to the capital required in the first place.The first business model we've analyzed is renting compute power. This is the infrastructure layer of the AI economy. Cloud providers build data centers filled with advanced graphics processing units, or GPUs, and rent that compute capacity to customers. In our base case, a large next-generation data center can generate a return on invested capital of roughly 30 percent simply renting AI compute power.And even if rental prices move around, our scenarios still produce returns ranging from low 20s percent to nearly 40 percent. So, despite the enormous cost of building and capital being deployed for these facilities, we think the economics here are quite attractive.The second business model we've analyzed is where an AI lab has their own model, and they also own their own infrastructure. They give access to their model through an API to consumers and enterprises who then build upon it, they utilize the model. In some cases, they build applications using that model that can be future sources of productivity or efficiency for the economy.In this scenario, we think the economics can be even stronger. When the model developer owns their own underlying infrastructure, our base case generates a roughly 75 percent incremental operating margin and a return on invested capital of 40 percent plus.These returns on invested capital are impressive, but what determines whether these returns can actually materialize?Well, two things matter a lot. The first is the price the developers are able to charge for tokens, which are the units of information that AI models process. The second factor that matters considerably is how efficient[ly] can this infrastructure process these tokens.This is why continued improvements in chips and software to drive higher token throughput – or more tokens per GPU per second – are critical to the long-term unit economics across this AI ecosystem.The third model we've analyzed is when the AI developers rent their compute infrastructure rather than owning it. So, effectively, they are paying someone else for the data centers and the GPUs that they need. While this lowers their returns on invested capital because another provider takes a piece of the unit economics, our base case still produces roughly a 30 percent incremental operating margin and 25 percent post-tax return potential.So, while the AI build-out requires enormous investment, the size of the spending alone doesn't tell the whole story about whether or not there are economic returns to come.What ultimately matters is the revenue and profit that the infrastructure can generate. And as more of the infrastructure shifts from training AI models to serving customers through emerging products and inference, we think we're going to get a much clearer answer to this question investors are asking today.Was all this spending worth it? Our research suggests: Yes.Thanks for listening. If you enjoy the show, please leave a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  AI Debt Starts Moving the U.S. Treasurys Market 08.09.2026 9min

  U.S. Treasurys are the foundation of the bond market. But our strategists Matthew Hornbach and Vishy Tirupattur explain the growing impact of corporate credit as AI financing accelerates.Read more insights from Morgan Stanley.----- Transcript -----Matthew Hornbach: Welcome to Thoughts on the Market. I'm Matthew Hornbach, Global Head of Macro Strategy at Morgan Stanley.Vishy Tirupattur: I am Vishy Tirupattur, Chief Fixed Income Strategist.Matthew Hornbach: Today, the interplay between the U.S. Treasury market and the corporate bond market.It's Tuesday, September 8th at 10am in New York.So, Vishy, what I'd like to do is start by asking you what's going on in the corporate bond market? What's coming to market? How much duration does it have? Talk to us about the theme of AI in corporate bonds.Vishy Tirupattur: So, this is what is happening. Hyperscalers have enormous CapEx needs, and they'll see opportunity for realizing return on invested capital; and in anticipation of that, the CapEx requirements for the AI infrastructure are enormous.And the key motivation that underlies is that the demand for compute vastly exceeds the supply of compute. And that as long as that demand-supply imbalance is there, there is a continuing need for CapEx, and that CapEx needs to be financed.And credit markets across the board, not just the unsecured market. You know, credit markets in public space, private, investment grade, unsecured, secured, high yield, below investment grade, leveraged loans, private credit – all of these channels of the credit markets are going to be deployed to enable that financing.Matthew Hornbach: Now, Vishy, you've written about this extensively over the course of the past year and have really been on the forefront of expecting a lot of supply. But have you even been surprised at the scale of the supply that we've gotten from these hyperscalers?Vishy Tirupattur: We are surprised, not so much by the scale of the issuance, but certainly by the breadth and the depth of these markets. And also, the ability of the markets to deal with complexity associated with this issuance. So, you know, about a year ago, we were expecting that much of this would be investment grade only; much of this would be only U.S. dollar denominated. We were wrong.We have seen issuance in seven currencies, and we have seen issuance substantially happen in investment grade, but also in high yield and in leverage loans. And a lot more in structured private investment grade credit and in securitized credit. We have been surprised by the ability of the markets to be both in their depth and the breadth and complexity; clearly been surprised.Matthew Hornbach: And one of the features of some of the issuance that may have been the most impactful on other markets has been the duration of unsecured AI-related financing. Talk to us a little bit about what's going on there.Vishy Tirupattur: So, if you look at the AI infrastructure, you can think of it in many different forms. One way of thinking about is the data centers building – the fab, the LAN, the chips and the servers. If you took the whole data centers, their expected life is something north of 20 years. And there is a lot of CapEx requirements.So initially, when you're financing the entire data center as one package, there has been issuance that went well beyond the 20-year point in the term. And keep in mind that the CapEx requirements are kind of across the board.So, it's not just been 20-plus year bonds. There have been bonds issued of various tenors, including a substantial supply of 20-plus year of duration.Now what is happening is that the focus of some of that is changing towards more shorter-term component of it. So, we've gone from financing the entire data structure, moving towards financing components, and in particular chips.The chips have a technological obsolescence factor associated with them. So, the chips need to be refinanced in about five years. So, the structures that are now increasingly emerging are towards amortizing structures that are more five-year duration, five-year maturity loans.Matthew Hornbach: So, this sounds like an interesting shift from much longer duration, longer maturity issuance to something in what the U.S. Treasury would call the belly of the curve. Kind of in the two to five-year maturity sector. Is that right?Vishy Tirupattur: So yes and no, and I'm hedging only for the following reason: Because a lot of this issuance, these issuers are relatively new in their size of these issuance, so they have not established a certain cadence of issuance.It is not that they have given up on the longer maturity, but the focus is shifting. We expect more to the five-year point of the curve.Another important thing is there has been a significant political pushback on the data centers. We have seen moratoria in the state of New York. It's a very live issue in much of the midterm elections. And opposition to data center is bipartisan, and it's very much alive.So, because of this, we may have some slowdown in the buildup of data centers, therefore slowdown in the long-term CapEx. But then near term, you know, the chips that were bought a few years ago need to be replenished and new chips need to be deployed.So, that financing focus might shift from a longer term to a shorter term. But that said, they're not going to let go entirely of the longer-term financing. Just the focus will shift towards the mid five-year term.Matthew Hornbach: That's very interesting because in the U.S. Treasury market, the focus has not been on the five-year sector. It has been further out the yield curve, where 30-year Treasury yields have been making highs for; that we haven't seen for a couple of decades now. And it hasn't been just in the nominal yield component of Treasuries; it's been in the real yield as well.And, in fact, the difference between the nominal and the real yield, the so-called break-even inflation rate, has actually been very stable throughout this move higher in overall bond yields.Vishy Tirupattur: So, Matt, let me ask you this question. For the last several weeks, we have seen long-end rates, particularly 20-plus year rates being persistently high. What is in your mind driving this persistently high yield in the 20-plus year category?Matthew Hornbach: So, this is something that Treasury Secretary Bessent alluded to in his recent interview on CNBC – that the month of August tends to be a month of lower transaction volumes in the U.S. Treasury market. And in particular, the middle of the month tends to be the lowest transaction volume period within any given month.And so, what we think might be going on is that investors who have been investing in these corporate bonds that you've talked about – may be preparing their own balance sheets for the issuance that most people tend to expect to come in September.Now, if that was the case, then it would be reasonable to assume that those investors tried to sell some of the bonds that they had. Or perhaps just stop buying any bonds in preparation for the supply that they would expect to come in September. If that was the case and the dealer community had to absorb that duration risk onto their balance sheets, they probably would want to recycle that back into the market.And the most liquid way of doing that is to sell treasuries. And so, we do think that there was very likely some selling of treasuries by the dealer community, as they were absorbing corporate bonds from the investor base.Vishy Tirupattur: So that makes sense, Matt. You know, if you think about the dealer community as well as investors, their anticipation of future; corporate bond issuance could drive their actions today.But the only point I would make is that because these are new issuers, and because they have not established a cadence, there could be substantial variability in their frequency. And periodicity that will come to the market. And in what tenor.You know, there's this change I talked about – longer term for financing needs versus component financing needs. There are all these degrees of freedom these issuers have that they can use that degrees of freedom. And the investors and the dealers don't have a lot of sense of what that might be.Matthew Hornbach: It sounds like there's going to be a lot of uncertainty, which might mean that there's going to be a lot of volatility.So, with that Vishy, thanks for sitting down and talking about the bond market with me.Vishy Tirupattur: Great to hang out with you, Matt.Matthew Hornbach: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen. And share the podcast with a friend or colleague today.
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  What Could Shake Up Markets in September? 04.09.2026 3min

  Investors have plenty to digest this month, from economic data to central-bank decisions. Our Global Head of Fixed Income Research Andrew Sheets outlines what could drive the next bout of volatility.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley.Today, several catalysts for more volatility later this month.It's Friday, September 4th at 2pm in London.Over more than a century of market history, Septembers have tended to see more volatility than the average month. You can't exactly set your watch by it, but the trend is definitely there. As investors come back from summer and capital market activity restarts in earnest, things historically tend to move.This idea seems especially relevant this year. Despite the headlines, it was a pretty calm summer for markets. Since early June, U.S. stocks, yields, and credit were all modestly higher, and they got there with minimal movement. The realized volatility – that is how much these markets are moving on a daily basis – has been historically low.September offers a number of catalysts that could test that.First and foremost is the Fed. Inflation remains above the central bank's target, and markets are pricing a roughly two out of three chance of a rate hike at the September 16th meeting. That's more uncertainty this close to a meeting than we've had in a while – and the impact goes far beyond a single decision. Live meetings from the Bank of Japan and the European Central Bank also loom in September.September is also a month that historically sees unusually heavy capital market activity. That makes sense. If you're a corporate and looking to raise money, it's often better to wait until investors are back from the summer before going out looking for those funds.But this September could be unusually active, given a growing IPO pipeline and continued funding needs from AI-related construction. And so, it's fair to say that even adjusting for September's usually heavy pace, there's an unusually wide range of outcomes around where capital market activity could land this month.Investors are also coming back from the summer with major uncertainty still hanging over global energy markets. Morgan Stanley's commodity team still sees global energy flows as severely restricted and recently raised their forecast for oil prices, seeing them reach about $100 a barrel in the fourth quarter of this year.The price of what's in that barrel is becoming even more extreme, with the price of diesel fuel in Europe up 140 percent since January 1st. And so, as inventories continue to draw down and questions around the duration of this conflict persist, both factors could drive more market movements.The good news is that while Septembers have historically been more volatile months, they're not necessarily a bellwether. And that could apply again. By month-end, we should have a much better idea of the Fed's path, the scale of capital market activity, and the state of energy supply.But until then, the level of expected volatility across many markets, particularly interest rate and foreign exchange markets, remains unusually low. Given this backdrop, we think those levels of expected volatility can rise.Thank you, as always, for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today. 
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  Why Oil Prices Could Rise to $100 Again 03.09.2026 5min

  Our Global Commodities Strategist Martijn Rats explains how tightening supply and shrinking buffers are pushing Brent prices up again, and what that would mean for fuel costs and energy markets.Read more insights from Morgan Stanley.----- Transcript -----Martijn Rats: Welcome to Thoughts on the Market. I’m Martijn Rats, Morgan Stanley’s Global Commodities Strategist.Today: why the oil market is tightening, and why we now see Brent reaching $100 per barrel later this year.It’s Thursday, September 3rd, at 3pm in London.It has been an extraordinary summer for oil. Brent — the global benchmark price for crude oil and the reference point for most of the world's oil trade — traded above $110 per barrel in mid-May, fell to $71 by early June, climbed back above $100 three weeks later, and then dropped again to around $79 per barrel. More recently, prices have moved higher again. But the question now is whether that is just another temporary swing. Or whether there is a sign that the underlying market has changed.We think it has changed. Supply is tightening, inventories are falling, and some of the buffers that helped absorb earlier disruptions are fading.The clearest evidence is in inventories. Crude oil sitting on the water fell from nearly 1.3 billion barrels in mid-July to 1.1 billion barrels recently. That was a decline of about 190 million barrels. During one four-week stretch, oil-on-water fell at the unusually high rate of 5.3 million barrels a day, the fastest four-week decline since this data series began about eight years ago. Usually, when there is such a large amount of crude oil that is brought on land, it drives up onshore oil inventories. However, not on this occasion. On a global basis, onshore crude oil inventories have fallen by another 38 million barrels over the same period. That means that those offshore barrels arriving were being used straight away rather than put into land-based storage.The biggest supply issue is still the Middle East. Crude flows from the Strait of Hormuz briefly recovered to about 15 million barrels a day after the June Memorandum of Understanding. That was close to the pre-conflict level. More recently, however, they have been running again around about 7 million. Now, Red Sea exports have also fallen sharply, from about 4 - 4.5 million barrels a day in March and April to around about 1.5 million barrels a day at the moment. Therefore, total regional exports are still up from the lows in March and April, but they are sharply down from that late June peak. Another source of support is fading: strategic petroleum reserves. Globally, those releases added around 2.5 million barrels a day to supply in March and April. But that has fallen sharply, and we do not anticipate material further releases from global SPRs after September.Then China is important, too. Its seaborne crude imports are normally around 10 to 11 million barrels a day but briefly fell as low as 5 million barrels a day leaving more oil available elsewhere. Now, China's buying activity still appears low, but at a minimum it has stabilized, and there are tentative signs of an increase. If Chinese imports have stopped falling and possibly go into reverse, they can no longer free up additional barrels for buyers elsewhere, making the global oil market tighter. So why hasn’t crude become even more constrained? It's because of refineries. Global refinery outages are running 5 - 6 million barrels a day above normal. Although supply of crude oil is constrained, this means that demand for crude is also reduced. Now, the result of that is that the tightness in the system has instead shown up in refined products rather than in crude. And diesel is the clearest example of this; and the one most likely to be felt throughout the economy, since diesel prices feed straight through into trucking, freight, farming costs, and many other areas. The front-month diesel benchmark in the U.S. was recently around $195 per barrel, versus Brent at $95 per barrel. The difference between the value of a refined product and the crude used to make it is called a crack spread. For diesel, that crack spread reached around $100 per barrel, an all-time high. Over time, that gives refiners a very strong incentive to bring back capacity where they can. If they do, crude demand should rise, whilst inventories are already falling and Middle East supply so far remains constrained. We now expect a full recovery in Middle East supply to take well into 2027. On that path, oil inventories should keep falling throughout the fourth quarter of this year as well as the first quarter of next year. We now forecast Brent to average $100 per barrel in the fourth quarter.Now, for much of this year, the oil market had several shock absorbers: strategic reserves, abundant barrels at sea, and unusually weak Chinese imports all helped. Those cushions are thinner now. That leaves less room for another disruption, just as the road back to normal supply is getting longer. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  3 Policy Catalysts to Watch This Fall 02.09.2026 10min

  Midterm elections, backlash against data centers and a U.S.-China summit. Michael Zezas and Ariana Salvatore discuss themes that could test investor confidence in the coming months.Read more insights from Morgan Stanley.----- Transcript -----Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Deputy Global Head of Research for Morgan Stanley.Ariana Salvatore: And I'm Ariana Salvatore, Head of Public Policy Research.Michael Zezas: Today, we'll look ahead to public policy catalysts that matter for investors this fall.It's Wednesday, September 2nd at 10:30am in New York.Okay, Ariana, there's a few days left in the summer, and investors are already starting to think about what's going to happen this fall. And there's a pretty heavy calendar; everything from midterm elections to some pretty important diplomatic dates. High level, what do you think people need to focus on?Ariana Salvatore: So, I'll start with probably the most consequential catalyst of the list that you mentioned, and that's the midterm elections. Obviously, not until November 3rd, but the debate is going to start to emerge over the coming weeks – in terms of if Democrats were to win just one chamber versus both chambers; if Republicans were to keep control; what could that mean for markets? And what are the durable policy themes?I think in this context, the biggest debate far and away is on data center pushback. And this has transitioned from more of a macro thematic. So, investors trying to understand the potential implications for the CapEx build-out, to more of a micro really granular question, right? Which races are the ones that we need to watch? Where are there states or jurisdictions that projects that are pending could be possibly called into question?And that's, sort of, the continuous debate that I've had recently with investors, trying to pinpoint it more precisely to figure out where exactly the build-up could be impacted.Michael Zezas: So, I hear from investors this general concern that the midterm elections will reveal that it's become a consensus preference amongst American voters and members of both parties to slow down on data center spending. Or perhaps even stop it or something more severe like that.What type of midterm election outcome would point to that as a possibility?Ariana Salvatore: Well, I would start by saying the politics here are scrambled in the sense that there's no clear fault lines when it comes to Democrats or Republicans around data center opposition, right? We are seeing some pretty notable pivots even from lawmakers that in the past were supportive of data centers. So that's why I think we have to zoom into these really specific races.And there I would say there's some governorships that matter actually more than some of the Senate races; because remember, governors also in certain states can appoint public utility commissioners. And in places like Texas, that actually could be a really consequential outcome for the 2026 midterm elections, more so than who ends up sitting in Congress on a very federal level.Michael Zezas: Okay. And so, would you say it's fair then that folks running for office who are challenging incumbents in both parties, who are expressing a desire for more regulation on data centers, that it kind of cuts across both parties? So, this is more about folks challenging incumbents than it is about one party or the other having a specific view on AI and the AI industrial build-out via data centers?Ariana Salvatore: That's right. It's hard to sort into these really generic party umbrellas, and there are a few nuances under the surface. If you look at something like Ohio. The governor's race there, both the Republican and Democrat candidates are proposing a conditional build-out, basically. So, if certain projects meet criteria, they're going to be allowed to proceed.In other races, like in Texas and Pennsylvania governorships, you're seeing the opponents basically propose a more restrictive form of the pause or directive that's already in place. So, I would say it's not very clean in terms of Democrat or Republican-led. And that just gives us conviction that this is going to persist and remain an issue even after November. Even though the federal policy incentives we don't think are likely going to change.Michael Zezas: So, we could see investors taking a signal about the AI data center build-out from an outcome where incumbents don't do particularly well.Now, I know we're still doing work on this, but what's the current thinking about – even if we were to see a result like that, how much should investors be concerned that the expectations around spending on data centers might not be realized because of new policy, other regulatory changes that would come as a result of the midterms?Ariana Salvatore: So, I would say overall, we are still very constructive on AI CapEx, right? So, our internet team is still forecasting over a trillion dollars of spending for the hyperscalers next year, and there are a few reasons for that, one of which has to do with this AI sovereignty theme that we've been writing about.So, this notion that governments are increasingly wanting to control their own stack and their own AI capabilities, so that's driving a bit of the spend. On the other hand, we are starting to see mitigation measures from some of these companies to appease some of that local community backlash. And there we don't see a one-size-fits-all approach.We see very tailored solutions depending on what the source of the pushback is. Just to give a few examples. When you have communities that care about electricity price increases, for example, many hyperscalers have signed on to the Ratepayer Protection Pledge. When you have communities that care about the environmental impact, you've got companies like Google who said they want to put forward a regulatory framework for water usage; Amazon also disclosing their water usage in data centers.And so, like I said, there's not really a uniformity to these responses, but enough that we think will mitigate the concern and still leaves us constructive on the overall build-out.Michael Zezas: Right. And you actually bring up a really interesting point on the idea of AI sovereignty. Some of the kind of similar concerns that are driving voter anxiety around the build-out of AI, might also reinforce some of the spending that has to happen there. To the extent that voters and policymakers are concerned that AI should be controlled and aligned with American values would require some spending to make sure that there's sufficient supply chains and other variables in play that the U.S. is in control of.Is that fair?Ariana Salvatore: That's right. That's one of the clear policy consequences we see from this shift in sovereign AI and governments seeking that control. The other one is, of course, the potential for further tech restrictions and divergence between the U.S. and China on AI specifically.Michael Zezas: So, on the topic of China and the U.S., one date that you point out here is September 24th, a date when the U.S. and China are going to be meeting again. What's on the table for discussion? What do investors need to know? Obviously, there have been concerns over the past year about the level of tariffs and trade tensions between the two.Is there anything here that we need to pay specific attention to?Ariana Salvatore: So, we think the overarching goal for both sides is to maintain this managed stability that was established in the May summit too. At that point, the clear deliverables were around trade, right? So agricultural purchases, Boeing purchases, et cetera.We think there's likely some small incremental change to those deliverables, in particular when it comes to AI dialogue. But notably, we think there's potential for escalation into that summit, again, within the bounds of what we call tactical escalation. But we do think that there's plenty of room for more policy escalation between both the U.S. and China in line with some recent action that we've seen over the past few weeks.Michael Zezas: Got it. And there's also a couple of important considerations around fiscal policy, funding, the National Defense Authorization Act (NDAA). Can you talk us through that a bit?Ariana Salvatore: Yeah, so fiscal's been in the headlines recently as well, just given the Treasury buybacks and crossing that $40 trillion threshold. And I think in that context, it sort of puts a renewed spotlight on government funding.There we see a potential latent risk of another shutdown come December, right? So, we saw a continuing resolution pass both the House and the Senate and sort of punt that debate until after the elections.And then the NDAA is the annual bill that funds the Pentagon. It has to be done in December on a bipartisan basis. So, the elections have the potential to shift the incentive structure for some lawmakers, and we could see these, kind of, re-emerge as really big debates towards the end of the year.Michael Zezas: Now, interestingly enough, we've got a bunch of catalysts to pay attention to: midterms, the potential for data center pushback as a consequence of it, a U.S.-China summit, which we think is going to result in the continuation of managed stability, and fiscal catalysts where, you know, the debt and the deficit have been in scope and concern, particularly for equity investors. All of that is happening against a backdrop where the historical norm going into midterm elections – is one where the equity market tends to struggle a bit. Is that fair?Ariana Salvatore: Yeah. So, we tend to see a little bit of negative seasonality into the midterm elections, and our equity strategy team has pointed out the potential for a knee-jerk reaction if you were to see Democratic outperformance in November. We think that's not likely to be durable. We think it's more so the case that investors are going to pull forward the anticipation of Democrats doing well in the 2028 presidential election.We don't think that's going to be a long-lasting theme in the market, but it's typically in line with what we see during elections.Michael Zezas: So, this idea that there are going to be seasonal challenges to the equity market is important to take on board, particularly when there are a lot of policy narratives which in the investor's mind could reinforce the price action that comes with weak seasonality.But our view is that you need to keep your eye on the secular trends here underpinning economic growth, including the AI build-out, which we think at the moment is going to be less sensitive to some of these policy outcomes than it might seem – given strong campaign rhetoric around restricting data centers.Is that a fair statement?Ariana Salvatore: Yes, that's right.Michael Zezas: Great. Well, Ariana, thanks for taking the time to talk.Ariana Salvatore: Pleasure speaking with you, Mike.Michael Zezas: And thanks for listening. Ariana, what should our audience do next?Ariana Salvatore: If you enjoyed the podcast, leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  The $33 Billion AI Security Opportunity 01.09.2026 4min

  As AI agents gain access to sensitive enterprise systems, companies need new ways to control what they can do. Meta Marshall breaks down the emerging market for agentic identity security.Read more insights from Morgan Stanley.----- Transcript -----Meta Marshall: Welcome to Thoughts on the Market. I’m Meta Marshall, Morgan Stanley’s U.S. Cybersecurity and Telecom & Network Equipment analyst. Today: AI assistants are starting to act on our behalf at work, which brings up a critical question. What should these agents be allowed to do? And how should those permissions be granted? It’s Tuesday, September 1st, at 10am in New York. More and more, AI is helping us get through the workday. We ask it to summarize documents, analyze data and take notes during meetings. Increasingly, though, these tools are moving beyond just answering questions to acting on our behalf. Suddenly, the security challenge shifts from managing a tool to governing a whole new digital workforce. In coming years, this problem should get bigger as we estimate seeing 79 AI agents and 109 machine identities for every human employee. Now, traditional identity security at work was built to answer two basic questions: Who are you, and what can you access? Think of it as your office badge. It identifies you and determines what doors you can open. AI agents, however, make that question much harder to answer. They can operate autonomously, move across applications and databases, collaborate with other agents. They take actions without direct human involvement.So, companies need to know not only what an agent can access, but why it needs access, for how long, and what it actually did. That’s the core foundation of agentic identity solutions. The risk environment from this problem is already substantial. About 80 percent of breaches in the work environment today involve stolen or misused credentials. Nine out of 10 organizations experienced an identity-related breach in the past year, and 83 percent experienced at least two. Now add potentially hundreds of machine and AI identities for every human; each operating continuously and at machine speed – and the problem is much larger.One solution to managing AI agents is zero standing privilege. Instead of giving an agent permanent access, you give it permission for a specific task and revoke that permission when the job is done. Here’s the issue though: Today, only 39 percent of privileged access is managed through this just-in-time or zero standing privilege architecture. And the reality is that humans can’t approve every request. More of those decisions will need to happen automatically, in real time, through what’s known as runtime governance. We estimate, as a result, that agentic identity alone could become roughly a $33 billion global opportunity in our base case, which brings the overall identity market opportunity to more than $60 billion in coming years. This need for agentic identity coming from AI could also push a historically fragmented industry towards a more unified platform. In one industry survey, 85 percent of organizations said fragmented identity systems delay their human response to identity threats, with respondents citing an average of 12 hours needed to respond per incident. We think that favors platforms that can manage human and machine identities together and make security decisions dynamically, overall making a more secure environment. This transition won’t happen overnight. Agentic identity products are still early, and we don’t expect an immediate financial impact. But as enterprises move from experimenting with AI agents to deploying them more broadly, spending to secure those agents could become a more meaningful growth tailwind in 2027. The longer-term growth opportunity comes down to a simple dynamic: more agents, with more autonomy, will require more control. And that could make identity security essential to scaling AI across the enterprise. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  From Coffee to Cans: A U.S. Caffeine Shift 31.08.2026 5min

  Younger generations are reshaping caffeine consumption. Our U.S. Household Products and Beverage Analyst Dara Mohsenian discusses how the growing appetite for energy drinks could influence beverage habits for years to come. Read more insights from Morgan Stanley.----- Transcript -----Dara Mohsenian: Welcome to Thoughts on the Market. I'm Dara Mohsenian, Morgan Stanley's U.S. Household Products and Beverage Analyst. Today, we're going to talk about how the next generation of U.S. consumers is really redefining their daily caffeine boost. It's Monday, August 31st at 10am in New York. For generations of Americans, caffeine has been synonymous with coffee. You wake up, make a pot, or stop at a coffee shop and start your day. But the picture today is different. Younger consumers have grown up with many more choices to jumpstart their day. Walk into a convenience store, gym, or college library these days, and you'll see that energy drinks are increasingly becoming an alternative for getting their caffeine boost. The reason people are drinking more of these caffeinated beverages is pretty straightforward. They want more energy. Among consumers who increased their energy drink consumption over the prior three months, 61 percent said they needed more energy. Experimentation is important, too. 44 percent cited trying new flavors, and 37 percent said they were trying new brands. Our survey of roughly 3,000 U.S. consumers points to significant runway for energy drinks going forward. When we spoke to current energy drink consumers, a net positive 19 percent expected to increase their consumption over the next three months. That's well above our prior surveys and is true for both men and women. Perhaps more interesting is who expects to drink more. Demographics have always been a key driver of energy consumption. The younger generation is increasingly choosing energy drinks over, historically, coffee and carbonated soft drinks. In our survey, importantly, if you look at the 25- to 34-year-old and 35- to 44-year-old age groups, they actually showed the strongest forward intentions to increase consumption. This means that the consumers who embrace energy drinks at the very young ages don't appear to be aging out of the category as they become older. They're taking the habit with them, essentially. It's also important to point out that caffeinated drinks is not a zero-sum game. Yes, the generational preferences are shifting, but the total pie is really growing here. Energy drinks is the biggest share gainer within caffeinated drinks, but only 20 percent of incremental energy drink consumption in our survey came directly from switching from coffee, and 22 percent directly from switching from carbonated soft drinks. So, most of the demand is actually incremental to caffeinated drinks in general. Going forward, we do expect energy drinks to be the highest growth segment within caffeinated drinks, growing at a high single-digit rate. We're even seeing it replace areas such as alcohol and snacks as it's moved to that affordable indulgence. And that's particularly driven by GLP-1, also accentuating the need for caffeine for consumers who are losing weight and have less energy.So, we see robust high single-digit energy category growth as likely to continue. That's been the compound rate, 9 percent over the last 15 years. Going forward with the demand drivers we talked about in a rational pricing environment, we see that likely to sustain. And much of the energy top-line momentum has been supported by new products and innovations. That includes zero sugar drinks. They're perceived as better for you. They're attracting new consumers, particularly women. And also, older consumers are sticking with the products as they age. Energy drinks have also become more affordable versus other beverage categories, particularly beverages, where the price increases have been sharper. Convenience is another part of the appeal. Among consumers who recently switched from coffee to energy drinks, 57 percent cited more caffeine per beverage and 45 percent pointed to convenience. Nearly half preferred the flavor of energy drinks, while 45 percent cited greater flavor variety. There may also be room for energy drinks to show up in more places. In our survey, 47 percent of consumers said they would buy more energy drinks if they were available in vending machines, 46 percent in fast food and fast casual restaurants, 37 percent in coffee shops, and this is showing up in custom energy drinks at a lot of the coffee shops covered by my colleague Brian Harbor. Again, it's expanding the pie. It's not just about taking share from carbonated soft drinks or coffee. So, America's caffeine habit is really enduring, and it's expanding. Younger consumers, they have more flavors, more formats, more ways to fit caffeine into different parts of the day, and those caffeinated preferences don't appear to be tapering off as consumers age. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  The Politics Behind the Rising U.S. Debt 28.08.2026 4min

  Our Head of U.S. Public Policy Research Ariana Salvatore looks at what the midterms may reveal about politician’s appetite for tackling the faster-than-expected increase in the U.S. debt.Read more insights from Morgan Stanley.----- Transcript ----- Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of U.S. Public Policy Research at Morgan Stanley. Today, why fiscal is back in focus and what we can learn about the broader debt trajectory from the upcoming midterm elections. It's Friday, August 28th at 10am in New York. Fiscal policy has moved back onto investors' radars following Treasury's recent buyback announcements. Those came in the same week that total U.S. debt crossed $ 40 trillion for the first time, a milestone that arrived months earlier than most people expected. As my colleague Andrew Sheets puts it, that's a big number. But the more useful question isn't the number itself. It's whether all this debt is starting to act as a brake on the economy.We don't quite yet see a credibility problem in the Treasury market, but that's exactly why fiscal is back in the conversation. And it sits against a bigger backdrop. The U.S. continues to run large deficits in an economy that isn't in a recession. Our economists expect the deficit to stay around 6 percent of GDP through 2027. And voters are clearly concerned about elevated debt levels. So why isn't fiscal austerity coming up more in DC? Simply put, we think the political incentives point the other direction. At the risk of oversimplifying, fiscal consolidation or deficit reduction means either less spending or more taxes. And the political costs of those choices land immediately. We think neither party, therefore, has the incentive to take on that type of policy change – if we don't see a meaningful cliff or a risk to existing programs, especially into an election. But what about after? We think the midterms won't in and of themselves be a catalyst to fix the debt trajectory. But they can tell us something about where this goes next. And I'd point to two things in particular. The first is Social Security. It's not likely to be the headline issue in November, but we could see a useful test case for the debt conversation more broadly because the deadline is creeping closer. The latest trustees report projects the retirement trust fund will become insolvent in the fourth quarter of 2032. And at that point, it could only cover roughly 78 percent of scheduled benefits without a change in law. Now, that's likely to matter more in 2028 than in this cycle, since whoever wins the White House that year will be in office when it hits. But the midterms can still show us where the politics are consolidating. Recent polling points to a fairly consistent pattern. Voters want lawmakers to act. They prefer raising taxes on high earners over broader benefit cuts. And they're notably more open to trimming benefits when it's targeted at the top of the income distribution. That likely explains why a number of 2026 candidates have converged on lifting the payroll tax cap, while some Republicans have largely retreated from campaigning on things like a higher retirement age. Watching which of those messages actually wins, especially in Senate races like New Hampshire or Maine, where a significant share of the electorate depends on these benefits, could provide some useful hints with respect to which of these policy changes actually resonate with voters and end up reflecting the eventual fix. The second is the broader fiscal landscape after the election. If we get a divided government in November, that typically means more fiscal noise around the recurring deadlines, like government funding and the debt ceiling. Those two matter for markets in very different ways. A shutdown's bigger effect tends to be indirect. So, think delayed or lower quality government data since agencies can end up working from smaller survey samples. That leaves investors and the Fed making decisions with less complete information for weeks at a stretch sometimes. The debt ceiling is more direct. That shows up most clearly in the Treasury bill market. Bills maturing around a potential deadline tend to cheapen relative to other short-term benchmarks as investors have to price default risk into that narrow window. And that's the case even when a resolution is still the base case. So, here's the through line: fiscal likely isn't about to become Washington's top priority just because debt crossed $40 trillion. But the midterms are a chance to see whether the political incentives are starting to shift – on Social Security specifically, and on the broader appetite for political fights around funding deadlines more generally. Either way, we think fiscal policy is set to stay in the headlines in the years to come. And especially so as we head into the 2028 presidential election season. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen. And share your Thoughts on the Market with a friend or colleague today.
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  Jackson Hole Tests the Fed’s Framework 27.08.2026 12min

  Investors are keeping a close eye on Jackson Hole for signals on the economic outlook and the path for rates. Our Chief U.S. economist Michael Gapen joins Global Head of Macro Strategy Matthew Hornbach to discuss whether markets get what they want—or what the Fed needs.Read more insights from Morgan Stanley.----- Transcript -----Matt Hornbach: Welcome to Thoughts on the Market. I'm Matthew Hornbach, Global Head of Macro Strategy at Morgan Stanley. Michael Gapen: And I'm Michael Gapen, Chief U.S. Economist. Matt Hornbach: Today, we'll be discussing the Jackson Hole Economic Symposium and Chairman Warsh's opening remarks. It's Thursday, August 27th at 10am in New York. So, Mike, let's get right into it and talk about the upcoming opening remarks by Chairman Warsh at the Jackson Hole Economic Symposium that will be delivered to the public at 10 am tomorrow, Friday. How are you thinking about what to expect from those opening remarks? Michael Gapen: Well, historically, and by historically, I mean in a post-2008-2009 world, Jackson Hole has been used, not every year, but frequently as a venue to communicate to markets. The longest gap on the Fed's meeting calendar is between the July and September meetings. So, Jackson Hole falls between that and provides a useful opportunity to communicate what might be coming. That's what's normally been done. Warsh has repeatedly stated he wants the Fed to talk less and communicate less and say less. So, I don't think we will see or hear, in this case, a lot about his views about how the economy is operating today and how monetary policy may be conducted into year-end. So, I don't think we'll hear a lot about, say, the December; the outlook for the economy from September to December, and what it might imply for interest rate policy or balance sheet policy. So, little in the way of near-term forward guidance. I do think, however, he did say in the July press conference that the venue would be good to tackle some of these big questions that he has talked about, that he's created these task forces for. So, whether it is the balance sheet or the inflation framework, or communication or AI and productivity or data quality and so forth. This would provide, I think, a reasonable opportunity for him to start talking about that. I don't think maybe we'll get a lot of conclusions. But I would look for commentary that's more in the question; or in the spirit of those big questions and less about the near-term conduct of policy.So maybe not what markets want, but this is what markets will get. Matt Hornbach: Just rewinding a bit, the conference itself is on a somewhat of a niche topic. What exactly is the conference about? And, in terms of the papers that get released at the conference, do you have any sense as to where they might be headed? Michael Gapen: So, the topic of this conference, the economic symposium, as you noted, is Financial Innovation: [its] Implications for [the] Payments [system] and [monetary] Policy. So, I would expect there to be a lot of sessions for things like central bank digital currencies or stable coins or Bitcoins. Near money type innovation that has happened in recent years, which leads to things like competition for deposits from the non-financial sector vis-a-vis the financial sector. So, a competition of near moneyness to money, if you will. Its implications for the interaction between the non-financial system and the financial system, competition for deposits. Does it create risks around financial disintermediation? And therefore, how might the regulatory environment and monetary policy work in that world? So little more, I'll call it, esoteric and maybe arm's length from the day-to-day conduct of policy. But I would look at the speeches probably in that vein. Deposit competition, financial market stability, and what kind of regulatory framework might you need to ensure we can still conduct policy effectively in that world. Matt Hornbach: Sounds like an exciting set of papers… Michael Gapen: Yes. Yes. Matt Hornbach: … for professors to read through. Michael Gapen: This is why they don't often leak the schedule too far in advance, right? We all might decide not to listen. Matt Hornbach: Indeed. Well, it is the end of August, and people are probably still on holiday here and there… Michael Gapen: I'm doing my best, but you called me in today. Matt Hornbach: Yeah, the least I could do. So, you did mention that this might be an opportunity for Chairman Warsh to maybe spotlight a bit these task forces and the topics that they're tackling, one of which is the inflation framework. And that word framework, I think, is important because the investors that we've been speaking with are frustrated that the Fed has not really laid out a framework – for monetary policymaking in this new era of Chairman Warsh, and his leadership at the Fed. So, I'm curious, if we're not going to get forward guidance on monetary policy and what will happen at the next meeting. And we're also not going to get much forward guidance on the framework that the Fed is using to decide on what to do with short-term interest rates. What are we meant to think about the framework? Michael Gapen: Yeah, I think ultimately, of course, we're going to need to know this, and this is what economists would refer to as the ‘difference between forward guidance and the "reaction function." So, the framework is really, you've got a set of tools, how do you intend to use them to achieve your objectives? A conventional Fed would say, "Well, if interest rates are low and inflation's too high, then we should raise rates," right? So high inflation brings high interest rates, low inflation brings low interest rates. All else equal, there's still the employment side of the mandate, of course. And the market had that view, at least initially, right? As we were in the June-July period and Warsh was talking hawkishly, the curve generally flattened. Expectations for front-end yields moved higher, and inflation-fighting credibility maybe kept the back end stable or brought the back end down. So, you could argue the markets looked at Warsh as maybe bringing a conventional reaction function and a conventional framework. But in the June and July FOMC meeting and in conversations with the press during the press conferences, Warsh – I don't want to say backtracked. He just didn't validate that and did say that we will achieve price stability. Didn't quite say how he would use the tools to do that. And even suggested maybe interest rates weren't the primary mechanism with which to influence, create, deliver price stability. So, the curve then steepened out. So, I think the market is wondering what Fed chair we have and what his reaction function is? And if inflation's running hot, is it an interest rate answer or is it a balance sheet answer? I'd also just add one last thing, Matt, is it makes a difference what the rest of the 18 people on the FOMC think. [Be]cause I think you would agree, and I'll put forward right now, I think they have a largely conventional view. Half of the committee thought it was time to raise rates in June. So, we have a balance between not knowing the chair's framework and having to intuit it. Or hope that we hear more. But then also knowing the other 18 who could band together and have greater voting power act in a largely conventional framework. I think that's the debate and the dilemma that we're all dealing with. Matt Hornbach: Yeah, I think investors, have certainly expressed frustration about the lack of guidance in any form or fashion. Perhaps with the exception of the balance sheet; we have a general idea that the balance sheet will be smaller in the future. And we have a sense from what Chairman Warsh has said in front of the House of Representatives during his semi-annual testimony that any changes would happen gradually over time. But, in terms of the pricing of the July meeting, and what happened at the July meeting, investors were very disappointed that the Fed did not go ahead and raise rates in July. Now, the market was only assigning about a one in three odds of a rate hike in July. And so, the fact that the Fed did not go ahead and raise interest rates in July was not a surprise in the sense of market pricing. But I do sense that investors were frustrated; that because they didn't get much forward guidance going into the July meeting, that the market might not have priced more probability on a July rate hike because the Fed, in fact, did not signal that they were leaning in that direction. But I see it as somewhat ironic because it seems to me, and I'd like to get your view on this. It seems to me that Chairman Warsh doesn't want to provide that type of specificity. He'd rather have the markets tell him what to do at an upcoming meeting, as opposed to him telling markets what to do at an upcoming meeting. How do you think about that? Michael Gapen: Oh, I think it's… [It] strains credibility to think that by saying nothing, you get the market's interpretation of the economy, data, and events – without the market thinking what the Fed thinks about it. I don't think that there's a world where you get the unvarnished market expectation independent of the Fed. So, I don't personally agree in the analogy of the market should play the ball and not the referee. The Fed is not a referee in markets. The Fed is a player in markets. Monetary policy acts through financial markets to achieve a set of financial conditions to deliver price stability and maximum employment. So, the Fed and markets are on the field at the same time. The Fed, in some ways, is the 800-pound gorilla on the field at the same time. So, everybody else on the field has to know what the gorilla is doing in order to do what they're supposed to do. Yes, there's always some circularity between Fed communication and market reaction to that. But I think that's natural and normal and important in making monetary policy effective – meaning it has to transmit through financial markets. And so, you could diminish the effectiveness of monetary policy if you don't tell the market what, at least what your framework is and what your reaction function is. And the tools that you intend to use and how you would intend to use them. Then the market could be an inefficient transmitter of monetary policy. So, I disagree with the notion that by saying less, the Fed learns more. But that's my view. I'm one of many. That's my opinion. The chair obviously has a different view. Matt Hornbach: Well, I can certainly understand not wanting to be the referee, especially after what we saw at the World Cup. There were a couple of games where the referee… Michael Gapen: And nobody likes the referee. At least half the people are upset with the referee. Matt Hornbach: Indeed. Okay. So, Mike, I think we're going to leave it there. Michael Gapen: Thanks for having me on, Matt. Matt Hornbach: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.
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  When Does Higher U.S. Debt Start to Matter? 26.08.2026 4min

  Our Global Head of Fixed Income Research Andrew Sheets discusses when and how higher yields and mounting U.S. debt could become more than abstract concerns.Read more insights from Morgan Stanley.----- Transcript -----Andrew Sheets: Welcome to Thoughts on the Market. I'm Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley. Today, at what point do higher yields and higher debt actually matter? It's Wednesday, August 26th at 2pm in London. In its first 240 years, the United States of America accumulated roughly $20 trillion in federal debt. The country has borrowed another [$]20 trillion in just the last 10. The question for investors is when this debt load will act as a brake on economic activity? Or, worse, create stress that disrupts today's relative calm?So, let's start with the first question. For economic activity, the bar seems pretty high. You see, even with all the activity around AI, U.S. corporate debt as a share of the overall economy is broadly unchanged in the last decade and actually lower than where it was before the pandemic. The balance sheets of the household sector in the U.S. are even stronger. Household debt to GDP is lower than where it was prior to COVID and lower than where it was in the year 2000. And this may even understate the strength – because much of this debt is locked in at historically low mortgage rates; while household assets, the other side of the balance sheet, have soared to record levels.That may help explain why both consumers and businesses have remained more resilient than expected this year despite the higher interest rates and energy prices. This divergence of trend between public and private balance sheets is also global. Europe has also seen higher government debt offset by even more private sector de-leveraging, while Japan has seen rising public borrowing and pretty stable private sector leverage. To some degree, this divergence between the public and private sides of the economy reflects a policy choice. Governments determine how to balance taxation and spending. And many countries, not just the U.S., have reduced taxes over the last decade while allowing public borrowing to increase. A deterioration of public sector finances relative to private sector finances – it's not especially surprising given that choice. If strong balance sheets are helping U.S. households and companies be less sensitive to higher rates, where should we look for stress? Well, for all of this debt, the U.S. bond market is actually still pretty well-behaved. U.S. inflation expectations are roughly unchanged year to date. Expected bond market volatility is historically low.Indeed, one reason that recent intervention by the U.S. Treasury into the bond market was such a surprise to investors was the lack of these usual stress markers. Instead, the point at which these higher yields might have a larger market impact may be up to another factor: asset allocation. Today, 30-year Treasury bonds yield about 3 percent more than expected inflation over that period. Long-dated U.S. investment-grade corporate bonds once again yield more than 6 percent. And so, the question of when higher yields begin to matter may be less about when businesses stop borrowing or consumers stop spending. And be more about when investors decide that bonds offer better value than stocks. So far, Morgan Stanley Research is not seeing clear evidence of that shift. Fund flow data and market correlations do not suggest a significant reallocation away from equities, and strong earnings growth is helping support the equity valuation case. But these are metrics that we'll be watching. In the meantime, we think that rising U.S. debt and Treasury market intervention may weaken the U.S. dollar, especially against a high-yielding currency with much, much lower debt levels – the Australian dollar. Thank you as always for your time. If you find Thoughts on the Market useful, let us know by leaving a review wherever you listen. And also tell a friend or colleague about us today.
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  Measuring the Market’s Megatrends 25.08.2026 8min

  Paul Walsh, Michelle Weaver and Daniel Blake discuss how thematic mapping can help investors separate true beneficiaries from market hype and identify risks hiding beneath the surface.Read more insights from Morgan Stanley.----- Transcript -----Paul Walsh: Welcome everyone to Thoughts on the Market. I'm Paul Walsh, Morgan Stanley's Head of Research in Europe. Michelle Weaver: And I'm Michelle Weaver, U.S. Thematic and Equity Strategist. Daniel Blake: And I'm Daniel Blake, Head of Asia Thematic Strategy. Walsh: And today we're discussing why thematic investing may be entering a new phase – moving from simply identifying big ideas to systematically measuring them.It's Tuesday, the 25th of August at 2pm in London. Weaver: It's 9am in New York. Blake: And it's 9pm in Singapore. Walsh: Daniel, let's kick our discussion off today. Thematic investing has become one of the most important ways for investors to think about long-term opportunities. But your latest work suggests the framework itself is evolving. So, what's changing? Blake: Well, if you look at where we've started. So thematic investing has been narrative-driven, focusing on identifying major structural trends for investors. So, at Morgan Stanley, we've identified core themes of artificial intelligence and tech diffusion, the future of energy, societal shifts, and the transition to a multipolar world. So, what's changing is that investment approaches are becoming much, much faster. So, we're now seeing clients deploy agentic AI to drive trade recommendations. And sure, AI can read a new 100-page thematic report from Morgan Stanley faster than humans. But for the right conclusions, it's important to connect these models with high-quality data sets. And we think that's going to be helpful for human investors as well. So, this is where the third phase of thematic investing comes in. The first phase was identifying secular trends that cut across markets and industries. The second phase was creating investable products around those themes. But this next phase is about measuring that exposure systematically in real time. So, this allows investors and their AI agents to identify whether a theme's importance is broadening or fading and to track individual companies' exposure to that theme over time. Walsh: So, the thematic investing is moving from narrative-driven to a higher velocity data-driven approach. And I guess that's where our thematic mapping exercise really comes in. So, Michelle, when investors hear the term thematic map, they may think it's just another screening tool. But it's much, much more than that, isn't it? Weaver: Absolutely. The easiest way to think about it is it's a research framework that sits on top of traditional sector and regional analysis. Historically, investors organize portfolios by country, sector, or industry group, and those verticals are still very important. But increasingly, the biggest investment forces cut horizontally across those boundaries. AI touches software companies, industrials names, healthcare, financials, and it's even had a huge impact on the utility sector.Thematic mapping helps us identify where those exposures exist across thousands of stocks, and importantly, how significant those exposures are – all with the help of our analyst experts. And the innovation isn't simply identifying if a company's exposed to AI, energy transition, or defense spending. It's determining whether that exposure is central to the investment thesis, just supportive or insignificant. And that's very different from traditional thematic baskets. Walsh: So, we identify the exposure, but the idea of significance seems particularly important because investors constantly hear companies talking about themes on earnings calls for example and in their public communications. But how do you separate genuine exposure from a more marketing-driven language around thematics, Daniel? Blake: This we see as the most valuable and ultimately human-driven part of the framework. So, as an example, we know that many companies are outlining their AI initiatives, and not all of them will end up being AI beneficiaries. So, the key question is how a given theme will impact revenues, margins, competitive positioning, and valuations. And this requires the deep knowledge of both the industry and the company, as well as where things are going. And so that's where our analysts come in. Across all countries, all sectors, mapping the materiality of their entire coverage, that's almost 4,000 companies, to every global theme in real time. Sp. our job in the thematic strategy team is to coordinate the framework, help identify emerging themes, and draw out the insights and recommendations. But the core insights are really coming at the analyst level, company by company. Walsh: And so, to your point, Daniel, it's about the analyst overlay in terms of significance that is really important. So, investors really shouldn't think of thematic exposure as a simple yes or no question… Blake: Exactly. That's really the new innovation in this framework, and most companies will sit somewhere along that spectrum for a given theme. And there's value in tracking how that position is changing over time. Walsh: Yeah, rate of change is clearly critical. And Michelle, one of the things I found particularly interesting is that the framework isn't just about identifying winners. It's also about identifying companies that may be challenged by structural change as well. Why don't you help our listeners understand why that's so important? Weaver: Because every major theme, yes, creates a lot of opportunity, but it also creates disruption. And I think investors naturally focus on beneficiaries. Where are we looking on the long side? But in many cases, understanding who might be negatively exposed can be just as valuable. If you think about AI, there are obvious beneficiaries, whether those are the big enablers or they're companies adopting the technology successfully. But there could also be companies facing pricing pressure, margin pressure, or broader disruption because of that same theme. And that's equally true whether we're thinking about the future of energy, societal shifts and big demographic realignments, or the multipolar world. And a complete thematic framework should help investors understand both parts of that equation. And this is becoming increasingly important as markets move from broad thematic enthusiasm towards more selective stock picking. Walsh: Absolutely. The ability of the thematic mapping to help us understand both sides the equation clearly incredibly important. Let’s bring it back to investors' portfolios. Daniel, how should investors think about thematic mapping as part of portfolio construction rather than simply stock selection? Blake: If you're looking at that portfolio construction level, whether you're a retail investor or you're one of the largest asset owners of sovereign funds, one of the biggest benefits is for revealing and managing hidden exposures.So, an investor might believe that their portfolio is diversified with positioning across many sectors and markets. But when you use the thematic map to underline, to explore the underlying thematic exposure, you might find that many of these holdings are tied to the same structural trend. So, the thematic map allows investors to better diversify portfolios while retaining the best expressions of desired themes. And as you mentioned, it's not just a screening tool. But it's pretty useful as a screening tool as well if you want to take exposure to a given theme overlay with valuations and preferences. It’s very helpful for that reason as well. Walsh: Yeah, understood Daniel. And Michelle, as we look stock markets right now, how are you seeing the opportunities via the thematic mapping work that we’ve done? Weaver: Flagging potential rotations is another key part of what this analysis offers. And if we think about your question from a valuation perspective, AI adopters currently look relatively inexpensive, but they still offer strong expected earnings growth. And we're also seeing analyst sentiment beginning to improve. You're seeing a growing number of companies having their earnings estimates revised higher. We're also seeing a similar opportunity across our societal shifts themes. Valuations here are well below their typical levels over the past decade. And at the same time, we're also seeing earnings expectations improve here. Walsh: So, perhaps the biggest takeaways are that thematic investing is becoming more measurable, more transparent, and more integrated into portfolio management. It's no longer just about spotting the next big idea. It's about understanding where that idea exists, how much it matters, and of course, how it's evolving. Michelle, Daniel, thanks so much for taking the time to talk. Weaver: Great speaking with you Paul. Blake: Thanks for having us. Walsh: Thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.
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  Markets Faces Hotter, Shorter Cycles 24.08.2026 5min

  Bonds may no longer provide the shelter investors have expected. Our CIO and Chief U.S. Equity Strategist Mike Wilson talks about the changing relationship between inflation, yields and risk.Read more insights from Morgan Stanley.----- Transcript -----Bonds may no longer provide the shelter investors have exMike Wilson: Welcome to Thoughts on the Market. I'm Mike Wilson, Morgan Stanley’s CIO and Chief U.S. Equity Strategist.  Today on the podcast I’ll be discussing the shifting landscape in macro markets.It's Monday, August 24th at 11:30am in New York.  So, let’s get after it.Over the past few weeks we’ve seen large moves in rates, oil, gold and crypto. What does it mean for equities? First, investors are still treating these markets as separate stories, when they are all part of the same regime shift that began with COVID. More than six years ago, in the depths of that recession, I argued investors should prepare for the return of inflation. That was a very out of consensus view. At that time, the world was obsessed with deflation, the 10-year Treasury yield was below 1 percent, stocks had been hit hard, and gold was sitting around $1,500 an ounce. But the policy response to COVID – what I called helicopter money – changed the game. It marked the end of the 40-year disinflationary regime and a very different investment environment for investors to navigate. It is also the foundation of our run it hot thesis. In a world where inflation has returned, cycles are likely to be shorter, policy more reactive, and leadership changes more frequent. That is very different from the 1982-to-2020 period. Then falling inflation and falling rates allowed economic cycles to stretch for eight or 10 years. We are now in a world that looks more like the post-World War II era: stronger nominal GDP growth, more persistent inflation, higher economic volatility, and a bond market that is no longer the tailwind it used to be for risk assets. In short, the great secular bull market in bonds ended with COVID. This has huge implications for investors of all stripes. My near term view on rates is also different from the mainstream. A lot of investors are saying rates are rising because of debt and deficits. I am not dismissing those factors. But I think the bigger driver is strong nominal GDP growth, which really is the result of aggressive fiscal policy since the pandemic. We are in an era of fiscal dominance, and in that environment the Treasury and the Fed are forced to find ways to fund deficits without breaking markets. That is how I interpret the Treasury’s recent buyback activity. I don’t think this is quantitative easing or yield-curve control. The scale of the program is not large enough. Instead, it’s just another tool to maintain market functioning and stable financial conditions. So when I look at the large move in precious metals and crypto last week, to me it suggests that markets believe this is just a first step toward larger intervention – if financial conditions tighten further. For equities, this all reinforces the quality rotation we have been recommending. Since the peak rate of change in earnings revisions breadth in June, led by Semiconductors, the market has gone through a significant leadership change. Quality factors have started to outperform after a year of lagging, which is exactly what we would expect as a post-recession recovery matures. High free cash flow, high gross margins, stable sales growth, and low capex-to-sales factors have all been working. Some investors are frustrated that the S&P 500 barely sold off during the historic momentum unwind. But if quality is coming back into favor, that makes perfect sense. The S&P 500 is one of the highest-quality benchmarks in the world. Leadership at the stock level may continue to morph, but index leadership for the S&P is unlikely to fade – and may even get stronger. The near-term risk remains oil. Brent crude prices have moved higher over the past couple of weeks. And rising oil has historically been a much more reliable headwind for equities than falling oil has been a tailwind. Our still constructive equity view does not require crude to collapse. It simply requires crude to stop rising. If oil spikes again because the Strait of Hormuz remains closed, that could pressure input costs, push yields and bond volatility higher, and create another round of market instability. Bottom line, the run it hot regime is alive and well. It supports equities. But it also shortens cycles, increases rotations, and forces investors to be more tactical at times. I currently like large-cap quality stocks, AI adopters, and the S&P 500 over international peers. Hedge the oil risk with energy stocks and keep your head on a swivel as we navigate the next phase of this recovery and bull market. Thanks for tuning in; I hope you found it informative and useful. Let us know what you think by leaving us a review. And if you find Thoughts on the Market worthwhile, tell a friend or colleague to try it out!
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  Shifts in Credit Markets for the AI Buildout 21.08.2026 5min

  AI’s enormous capital requirements are reshaping the way companies tap credit markets. Our Chief Fixed Income Strategist Vishy Tirupattur takes stock of this summer’s key financing developments. Read more insights from Morgan Stanley.----- Transcript -----Vishy Tirupattur: Welcome to Thoughts on the Market. I am Vishy Tirupattur, Morgan Stanley’s Chief Fixed Income Strategist. Today: Why the summer of 2026 is all about AI Financing and the evolution of credit markets. It is Friday August 21st at 2pm in New York. The summer of 2026 may ultimately be remembered not for a new model release or a breakthrough chip, but for developments in AI financing that highlighted how quickly capital markets are adapting to the demands of the AI buildout. The starting point of our analysis remains unchanged: the demand for compute continues to outstrip supply of compute, resulting in upward revisions in AI infrastructure capex expectations as hyperscalers commit additional capital to secure future capacity. Our equity research colleagues now estimate that the total capex for the four largest hyperscalers will rise 57 percent in 2027 versus 2026. These spending plans reflect growing conviction that such investments can generate 25 percent plus returns on invested capital. At the same time, the lag between capex deployment and monetization continues to pressure near-term cash generation, with our analysts' 2027 free cash flow estimates for the four hyperscalers continuing to move lower. To a credit analyst, what this means is that the result is a widening financing gap in 2027. That means AI-related credit issuance will remain substantial and may even need to increase further before cash flows from these investments begin to catch up. Developments in credit spreads this summer have been equally telling. Credit spreads for hyperscalers have widened meaningfully. More notable even than the absolute level of widening is the divergence across financing channels. For example, spread widening was most pronounced in unsecured bonds, where issuance volumes accelerated sharply and investors remained exposed to a broader range of risks tied to the AI investment cycle. By contrast, spread widening in data center ABS and CMBS was much more modest. These structures are backed by operating assets that have already been constructed, powered, and leased, with contractual cash flows largely established. Combined with a more measured pace of issuance, these characteristics helped insulate securitized credit products from the volatility seen in unsecured credit markets. The divergence across credit markets also reflects the differences in issuer incentives and sensitivity to funding costs, which will shape issuance volumes going forward. At the higher end of the quality spectrum, the major hyperscalers, with average ratings of roughly AA, combine substantial financing needs with significant ratings flexibility. Given their ROIC expectations, these issuers are relatively insensitive to modest changes in borrowing costs. Higher funding costs alone are unlikely to materially slow capital raising by the highest-quality participants in the AI ecosystem. The opposite is true further down the quality spectrum. Lower quality hyperscalers and data center developers, including former bitcoin miners and REITs, have less balance-sheet flexibility and lower tolerance for higher funding costs. For these borrowers, wider spreads represent a more meaningful constraint, making funding costs a natural stabilizer of future supply. The next phase of AI financing is also likely to look quite a bit different as incremental capex shifts from data center shells toward compute equipment, particularly servers and chips, as well as energy assets. While some of these assets have already been financed through high-yield bonds and leveraged loans, compute infrastructure is particularly well-suited to asset-level financing, creating a larger role for private capital. The emergence of large-scale component financing is likely to be enabled by the highest-quality issuers flexing their ratings as well as balance-sheet strength. We expect these issuers to increasingly provide backstops, credit support arrangements, and residual value guarantees, helping private capital underwrite ever-larger pools of AI infrastructure assets. As AI scales from a technology cycle into a capital cycle, understanding the nuances of financing is becoming increasingly important. In the next phase of the AI buildout, understanding the flow of capital may prove nearly as important as understanding the flow of innovation itself. AI is no longer just a technology story. It is increasingly a capital markets story as well. Thanks for listening. If you enjoy the podcast, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  The New Map of AI Power 20.08.2026 7min

  AI is becoming a matter of national strategy, as countries seek more control over their own technology. Our Heads of U.S. Public Policy Ariana Salvatore and Global Thematic Research Stephen Byrd look at the race for AI sovereignty and its implications for investors.Read more insights from Morgan Stanley.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of U.S. Public Policy Research at Morgan Stanley. Stephen Byrd: And I'm Stephen Byrd, Head of Global Thematic Research at Morgan Stanley. Ariana Salvatore: Today, we'll be talking about AI sovereignty, what it means, what countries around the world are doing to advance their own goals, and what a more fragmented AI ecosystem could mean for investors.It's Thursday, August 20th at 2pm in New York. Stephen Byrd: And it's 9pm in Helsinki. Ariana Salvatore: As AI becomes more powerful and therefore more important to the global economy, countries are asking a basic question: How much of it do we need to control ourselves? That's at the heart of AI sovereignty, making sure governments around the world can access the computing power, data, energy, and technology they need even as geopolitical tensions may rise. Stephen Byrd: And that seems to fit into a broader trend we've been talking about for some time, a more multipolar world where governments are increasingly willing to intervene in markets around strategically important technologies. Ariana Salvatore: Exactly. We describe this as a potential ‘two worlds dynamic.’ The U.S. and China have been gradually de-risking from one another, particularly in advanced technology. We've already seen policy tools, including export controls, tariffs, and incentives for domestic manufacturing. And as AI becomes more strategically important, our expectation is for policy intervention to increase rather than decrease. But what's interesting is that the U.S. and China aren't necessarily pursuing sovereignty in the same way. Stephen Byrd: So, let's unpack that. Can you start with the U.S.? What does the American approach look like? Ariana Salvatore: Yes. We think the U.S. is trying to do two things at once, basically. On one hand, it wants to preserve national security guardrails around some of the most sensitive AI capabilities. But on the other hand, it has an incentive to make sure the American AI tech stack is broadly available to allies and partners. So, there's an inherent tension there between those two objectives. Obviously, if you restrict access too much, you can encourage other countries to develop alternatives,. But if you allow unrestricted access, policymakers may begin to worry about losing control over strategically important technology. So, the way that we chart this is through a middle path. We think the direction of travel looks less like complete technological separation and more like selective access – tighter controls around sensitive capabilities alongside an effort to maintain the global reach of the U.S. AI ecosystem. Stephen Byrd: Whereas China's approach is more focused on building out an indigenous ecosystem. Specifically, we see policymakers in China pursuing greater self-sufficiency across the AI stack, from chips and computing infrastructure to cloud and models. Our China strategists argue that bifurcation could actually increase China's incentive to build a larger China-compatible AI ecosystem abroad, particularly across the Global South and other markets that aren't firmly aligned with the U.S. ecosystem. China's model emphasizes lower-cost models, open weight ecosystems, subsidized compute, cloud partnerships and infrastructure exports. So, the competition could increasingly be about not only which country has the most advanced model, but which ecosystem can achieve the widest adoption. Ariana Salvatore: That's right, and that brings us back to this idea of two worlds. So, Stephen, is the implication here that we're going to be heading toward two completely separate AI systems? Stephen Byrd: Not necessarily, I'd say. You know, the supply chains are still deeply interconnected, so our research does not suggest a sudden decoupling. But we could see greater duplication and less globally fungible infrastructure. Countries may increasingly want compute located domestically or regionally. Sensitive data may need to stay within particular jurisdictions, and companies may need different cloud cybersecurity or distribution arrangements in different markets. And that means the same global level of AI demand could require more physical infrastructure than it would in a completely integrated world. Ariana Salvatore: So, fragmentation, like other themes within multipolarity, are more economically inefficient. But potentially pretty important for the investment cycle. We think sovereign AI can make the system more redundant and more capital-intensive as a result. Our research teams think there are potential beneficiaries from that across semiconductors, data centers, networking, power, cloud, cybersecurity, and infrastructure software. Let's look at data centers specifically. If governments and enterprises increasingly require local hosting and greater control over sensitive data, you will inevitably need more geographically distributed infrastructure. Colocation operators, we think, can benefit because they provide the power, cooling, space, security, and interconnection that can allow customers to keep workloads in specific jurisdictions. So, the fragmentation we're talking about may introduce inefficiency at a system level while simultaneously creating incremental infrastructure demand.  Stephen Byrd: And there's another constraint here that we probably shouldn't overlook, which is energy. Compute ultimately needs power. So, access to reliable, affordable electricity becomes part of a country's competitive position in AI, which ties into our politics of energy theme that we outlined in January of this year. But as we've also noted, that creates a political constraint. Our thematic work has highlighted rising concern around the impact of data center growth on power prices and on local infrastructure. This has really shown up in a big way in the U.S. And that can mean more pressure to protect existing rate payers, more emphasis on low-cost power. And greater interest in behind-the-meter or off-grid power solutions that allow data centers to secure electricity without putting the same pressure on the grid. Ariana Salvatore: Which suggests that there's a cost, in fact, to AI sovereignty as well. Stephen Byrd: Absolutely. And if countries want more domestic compute, duplicated infrastructure, localized supply chains, and greater redundancy, the system may become more resilient, but potentially more expensive – and we're certainly seeing signs of it being more expensive. Compute and power are already constrained in many markets. Add to that regulatory requirements, localization, and potential restrictions on technology transfer, and reducing dependence can carry an inflationary cost. So, for investors, I think the question isn't simply whether sovereign AI increases spending. It's also where that spending has to occur, what gets duplicated, and which parts of the stack become strategically indispensable. Ariana Salvatore: So, Steven, to frame this for investors, the way we see this theme unfolding suggests that sovereign AI reinforces rather than undermines the broader AI CapEx cycle. We think competition between the U.S. and China is intensifying. Countries outside those two ecosystems increasingly will want greater national resilience and flexibility. And that combination can support additional spending on compute, data centers, networking, and power for years to come. Lastly, an increasingly important question is who controls and supplies that infrastructure, energy, standards, and supply chains that will allow those models to operate at scale? Stephen Byrd: And that may ultimately be the most important thing to watch. Sovereign AI is another example of geopolitics moving directly into the technology investment cycle and potentially changing not only where AI gets built, but how much infrastructure the world needs to build it. Ariana Salvatore: Steven, we'll leave it there. Thanks so much for joining me. Stephen Byrd: Great to be here, Ariana. Ariana Salvatore: And thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.
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  El Niño’s Ripple Effects on Markets 19.08.2026 4min

  From chocolate and sugar prices to energy markets and inflation, El Niño’s impacts may soon reach far beyond the weather forecast. Our Latin America Agribusiness Analyst Julia Rizzo maps out where the pressure could emerge first.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I’m Julia Rizzo, Latin America Agribusiness Analyst at Morgan Stanley. Today: how El Niño could move from the Pacific into commodity markets, grocery prices, and investor portfolios. It’s Wednesday, August 19th, at 10am in Sao Paulo.You may not follow rainfall patterns in Brazil or cocoa-growing conditions in West Africa. But you immediately notice when chocolate, groceries, or electricity cost more. And you can connect the dots to El Niño -- a warming cycle in the Pacific Ocean that disrupts weather globally. It changes where rain falls and shapes the outlook for crops, power markets, transportation, and inflation. There is now a 95 percent chance of a very strong El Niño in the fourth quarter of 2026. It could end up being among the most powerful events in more than 75 years of recorded history. Timing and location matter greatly. Crop damage often depends on whether heat or heavy rain arrives during a narrow planting, flowering, or harvest window. The most direct effects are likely to appear first in commodities. Sugar is on the list of commodities most exposed to favorable price dynamics from weather conditions. Cocoa also looks tight. Grains are more complicated. Soybeans need evidence of a net South American production loss. Problems in northern Brazil may be offset by stronger crops in Argentina or Brazil south. Corn is even more dependent on timing. The key near-term catalyst remains U.S. weather and crops. What happens next matters well beyond agricultural markets. Food is the main channel through which El Niño reaches the broader economy, and the effect usually appears after a one-year lag. That makes inflation primarily a 2027 story. In Latin America, the largest incremental inflation risks are concentrated in Peru, Brazil, and Colombia, with most of the pressure arriving in 2027. That matters for central banks. Weather shocks can fade. So, policymakers often look through an initial rise in food prices. The greater concern is that higher food costs may begin to influence inflation expectations, wages, rents, or other prices across the economy. Colombia stands out as the clearest case where those second-round effects could complicate monetary policy. India and Indonesia also face meaningful economic exposure. Agriculture accounts for a large share of output and employment in these countries. India is especially sensitive. Agriculture represents about 18 percent of the GDP, 43 to 45 [percent] of jobs, while food makes up roughly 36 percent of the consumer price basket. Record food reserves may provide some protection, though a poor growing season could still weigh on rural incomes and keep food inflation elevated. The economic consequences will vary widely. Higher agricultural prices can support farmer income and benefit some parts of the food and agricultural supply chain. They can also raise costs for households, food producers, and businesses that depend on grains and sugar. Utilities may benefit in markets where hotter or drier conditions lift electricity prices, while heavy rainfall could disrupt transport routes and airports in those exposed regions. Historical asset-price signals are limited, so this is less of a broad macro trade than a detailed assessment of local exposure. Rainfall, crop timing, inventories, and the ability to pass higher costs on to consumers will determine where the pressure lands. El Niño may begin in the Pacific, but its market footprint can travel from cocoa farms in West Africa to a grocery aisle, a power grid, or a central bank meeting. Thanks for listening. If you enjoy the show, please leave us a review and share Thoughts on the Market with a friend or colleague today.
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  Korean Stocks: From Correction to a Healthy Recovery 19.08.2026 4min

  After a historic rally and a sharp correction, South Korea’s equity market may be approaching a turning point. Our Chief Korea Equity Strategist, Joon Seok, explains that the next cycle will need stronger foundations and more sectors joining in.Read more insights from Morgan Stanley.----- Transcript -----Welcome to Thoughts on the Market. I’m Joon Seok, Morgan Stanley’s Chief Korea Equity Strategist.Today: Why Korea’s equity market may be moving from a sharp reset toward a broader and more sustainable recovery.It’s Tuesday, August 18th, at 2pm in Seoul.South Korea’s stock market has delivered the kind of ride that makes even long-term investors check their phones more often than they would like. The KOSPI surged 101 percent in the first half of 2026, then fell more than 38 percent from its peak by July 30th. But the market now appears to be moving toward a more durable recovery.The first reason is valuation. Take the KOSPI’s forward price-to-earnings ratio, which compares share prices with expected profits over the next year. It fell below five times, its lowest level since 2004. Our capitulation index also dropped to minus 2.53. This index combines market momentum with the breadth of the sell-off, so it helps show whether fear has become widespread. Readings below minus two have often marked troughing territory outside the major crises.The second reason is that forced selling appears to be easing. Now, we have seen leverage as a double-edged sword as leverage helped fuel the rally, but it also made the decline sharper as investors were forced to cut positions. Assets in leveraged single-stock ETFs have fallen about 70 percent from their June peak, and margin lending has also come down. Now, hedge funds have completed roughly three quarters of a typical risk-reduction cycle. Put simply, the most intense selling may already be behind us.Still, a healthier recovery needs more than a rebound by the tech sector. Tech remains central because AI infrastructure continues to drive demand for advanced memory. Morgan Stanley Research expects global spending by large tech platforms to reach 805 billion U.S. dollars in [20]26 and 1.2 trillion dollars in [20]27. That creates a lot of opportunity – but it also keeps markets sensitive to any change in capital spending, chip pricing or competition.The broader Korean economy offers support. Real GDP growth has exceeded 3 percent for two consecutive quarters, up sharply from 1.1 percent in 2025. Full-year growth is now likely to land in the mid-3 percent range; and generally, Korea’s growth is around 2 percent. Importantly, the improvement is spreading beyond exports. Consumption is recovering, tourism has surpassed pre-pandemic levels, and the government is targeting 23 million foreign tourists this year.There are trade-offs. Inflation reached 3.2 percent in June, and the Bank of Korea raised its policy rate to 2.75 percent. A measured hiking cycle could take rates to 3.5 percent by the first quarter of 2027. Higher rates may help financial-sector earnings, but they also raise financing costs for households and businesses.The source of market liquidity is changing as well. Domestic retail investors drove much of the first-half rally, but tighter leverage rules mean foreign investors are likely to determine the next leg higher. Corporate-governance reforms and better capital management could also encourage broader international participation.We continue to see a path toward a KOSPI target of 9,000 by June 2027, with a bull case of 10,500 and a bear case of 5,500. The next phase should be steadier and more balanced. Industrials, financials, healthcare, communications, and consumer staples should also contribute alongside technology.Korea still has room to run. But the stronger signal may be quality – meaning earnings resilience, disciplined capital management and broader participation. The stock market’s initial rally was fueled by speed and concentrated leadership. The next phase will require wider and more durable support.Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.