By Lewis Krauskopf
NEW YORK (Reuters) – Recent action in the U.S. stock market suggests investors are beginning to price in a “no landing” economic scenario that involves an expected pickup in growth, Morgan Stanley equity strategists said on Monday.
For months, investors have been bracing for a “soft landing” for the economy, which sees tepid growth alongside inflation falling from high levels.
“However, the macro data and equity market leadership have started to support the no landing outcome,” Morgan Stanley strategists led by Michael Wilson said in a note.
Strong economic data and firmer-than-estimated inflation reports have also reduced expectations for Federal Reserve interest rate cuts. Traders in fed fund futures on Monday were betting on a total of 62 basis points of rate cuts this year, down from January estimates of 150 basis points.
Sectors often linked to economic growth,…
