US Bank Flips Bearish on Red Hot Group of Stocks, Despite Predicting ‘Sugar Rush’ Stimulus in First Half of 2026
Morgan Stanley’s Global Investment Committee is sounding the alarm on some of the market’s hottest trades, warning that it may be time to take profits after a blistering rally.
In its latest Weekly Market Insight Report, the bank noted that the S&P 500 has climbed 34% off its April lows – one of the strongest surges outside a recessionary recovery in 75 years.
Despite the market’s resilience, Morgan Stanley’s strategists are growing skeptical. The firm’s Global Investment Committee (GIC) believes the rally has likely gone too far, too fast – particularly in the highest-beta and most speculative corners of the market.
Says the analysts,
“Consider taking profits in high-beta, small/micro-cap, speculative and unprofitable equities and redeploying to large-cap core and quality stocks, including the ‘Mag 7′ and GenAI beneficiaries in financials, health care and energy. In fixed income, we suggest shifting up in duration to the five-to-ten-year belly of the curve’ to clip coupons, while focusing on asset class diversification. International equities and real assets, including gold, real estate and select private infrastructure, are opportunities to add.”
The GIC says it remains in the “midcycle soft landing” camp, expecting the Federal Reserve to resume rate cuts in 2026 after a short-term jolt of fiscal and monetary easing, a so-called “sugar rush” stimulus in the first half of the year.
Under the bank’s outlook, the U.S. economy could deliver around 2% real growth without tipping into recession, though the firm warns of a weaker labor market and fragile consumer demand.
Generated Image: Midjourney
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
AI Grabs Headlines, Yet Gold Industry's Productivity Fuels Worth
- Two Gen Z entrepreneurs rejected Elon Musk's funding to develop a brain-inspired AI outperforming OpenAI and Anthropic models. - QGold Resources initiates economic assessment for its Oregon gold project with 1.543M oz reserves, signaling strategic expansion. - Galactic Gold appoints mining veteran Manley Guarducci to enhance operational efficiency amid industry consolidation. - Alamos Gold and B2Gold demonstrate resilience through record cash flow and production growth despite geopolitical risks. - Gold
Bitcoin News Update: As Major Crypto Firms Target Affluent Investors, Authorities Increase Scrutiny
- Binance launches "Prestige" to target high-net-worth clients, competing with Morgan Stanley and Fidelity through tailored crypto services. - KuCoin secures MiCA license in Austria, enabling EEA operations and emphasizing compliance with global regulatory standards. - Binance faces lawsuit alleging $50M+ in Hamas-related transactions, highlighting crypto's regulatory challenges amid expanded AML measures in South Korea. - Houdini Pay introduces privacy tools for freelancers, addressing wallet transparency
XRP News Today: Institutional ETFs May Exhaust XRP Reserves Earlier Than Expected
- XRP's institutional ETFs (e.g., Franklin Templeton's XRPZ) drive rapid supply depletion risks as inflows outpace expectations. - Analyst Zach Rector models potential $168 price targets if XRP ETF inflows mirror Bitcoin's $62B 2024–2025 surge pattern. - ETFs enhance XRP liquidity for SMEs and fintechs but expose risks from whale manipulation and unclear Asian regulations. - Market analysts warn XRP's limited 60.25B circulating supply faces accelerated institutional demand pressures amid growing ETF adopti
CME's Twofold Mission: Emergency Response and Advancing Cryptocurrency Innovation
- CME Group's November 2025 data center outage disrupted global trading, highlighting infrastructure vulnerabilities and prompting redundancy calls. - CME launched XRP and Solana spot futures on December 15, 2025, addressing surging institutional demand for altcoin exposure beyond Bitcoin and Ethereum . - Crypto derivatives trading hit record volumes, with 794,903 contracts traded on November 21, 2025, as year-to-date volume grew 132% compared to 2024. - CME plans 24/7 crypto trading in early 2026 but rema
Trending news
MoreCrypto prices
More
