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
BCH rises 5.15% as institutions invest, prompting analysts to revise their forecasts
- Institutional investors boosted stakes in Banco de Chile (BCH), led by Campbell & CO’s 185.3% share increase to $794K. - Yousif Capital, Parallel Advisors, and Farther Finance Advisors also raised holdings, with the latter adding 3,009 shares (1,355.4% surge). - BCH’s Q3 earnings missed estimates but maintained strong profitability (23.25% ROE), while analysts raised price targets to $33–$35. - Institutional ownership now covers 1.24% of shares, reflecting confidence in BCH’s resilience despite short-ter
Ethereum News Today: CoinFello Bridges DeFi Gap by Translating and Automating Smart Contracts into Everyday Language
- HyperPlay Labs launches CoinFello, an AI-powered DeFi tool automating smart contract interactions via natural language commands. - Built on EigenCloud and MetaMask, it maintains user custody while enabling cross-chain transactions and risk mitigation through self-sovereign AI agents. - The platform's verifiable AI infrastructure and plain-language interface aim to reduce DeFi barriers, with a Q1 2026 public release planned. - Critics highlight governance challenges, but CoinFello's deterministic automati
2026 Energy Forecast: Renewable Energy Grows, Emissions Steady as AI Expands
- U.S. wholesale electricity prices projected to rise 8.5% in 2026 due to AI/data center demand surging in Texas. - Renewables to reach 26% of U.S. generation in 2026, but CO₂ emissions remain flat at 4.8 billion metric tons. - Tech giants invest $40B+ in AI infrastructure, driving innovations like Airsys' zero-water cooling systems and MiTAC's liquid-cooled clusters. - Natural gas maintains 40% generation share despite $4.00/MMBtu price surge, while oil prices fall to $55/barrel amid stable production. -
Ethereum News Update: Major Institutions Make Significant Investments in Ethereum as Recent Upgrades Pave the Way for Widespread Adoption
- BitMine Immersion (BMNR) now holds 3.6M ETH ($11B), becoming Ethereum's largest treasury via a pure-play staking model. - Ethereum's Fusaka upgrade (Dec 3, 2025) introduces PeerDAS and Verkle Trees to boost scalability to 150M gas units per block. - Institutional adoption accelerates with Singapore Exchange launching crypto futures and BMNR's stock seeing $1.4B daily trading volume. - Regulatory developments like the U.S. GENIUS Act and SEC's Project Crypto aim to clarify tokenized assets, boosting tradi
Trending news
MoreCrypto prices
More
