What Is Troubling Morgan Stanley: “We Haven’t Done Well Enough To Pack It In And Head Off To The Beach”
by Tyler Durden
ZeroHedge.com
05/15/2016
Some interesting laments from Morgan Stanely’s chief cross-asset strategist Andrew Sheets as he explains what appears to be troubling not just Morgan Stanley’s traders and researchers, but virtually all of Wall Street.
How Can a Good Year Be Bad?
If there’s a defining characteristic of 2016, it may be that few are enjoying it. Investors who entered the year optimistic were often forced to take losses by the year’s unrelenting start. Investors who entered the year negative often struggled to turn this around quickly enough as illiquid markets bounced ferociously off. Through the end of April, the average macro hedge fund was down 0.4% and the average long/short equity fund was down 3.8% (per Hedge Fund Research Indices). And if you work on the sell-side, 2016 hasn’t exactly been a barrel of laughs either.
We dwell on these difficulties only because, by a number of measures, 2016 hasn’t been bad. Global equities are down by only 0.6% YTD, despite the sharp fall at the start of the year. Global high yield is up 7.3%. EM hard-currency debt is up 7.6%. Oil is around 28% higher than where it started the year, and even global government bonds are up 8.4% on the year. US and emerging market equity volatility is now below the long-run average. As I write, I’m sure there is an individual investor in my hometown of Portland, Oregon sitting on a 50:50 portfolio of US stocks and bonds, soundly beating a large number of macro hedge funds.
The Rest…HERE
