From Pragmatic Capitalism:
Like most of the big banks and research firms, Morgan Stanley is pretty optimistic about 2011. Their macro outlook was recently summarized as follows:
"U.S. growth should accelerate and double-dip, and deflation risks are low. In relatively short order, the outlook for the U.S. economy has improved quite significantly.
The surprise agreement, when gridlock was expected, to extend the expiring Bush tax cuts and unemployment benefits along with other fiscal stimulus measures has raised our U.S. economists' 2011 GDP forecast to 3.6% from 2.9%, provided the legislation is passed. They also see a modest uptick in inflation to 2.1%, from 1.7% in 2010.
A key pillar in this improving growth outlook is exports. In October, exports surged 3.2% over September, and should contribute 3.2% of the 4.2% GDP growth in 4Q10. Looking forward, the strong growth in EM bodes well for U.S. growth, as it accounts for an increasingly large share of U.S. export, a reflection of global rebalancing.”
Within this bullish argument they’ve provided five investment themes for the upcoming year...
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