Morgan Stanley: Markets Should Remain Cautious Amid Uncertainty of the U.S. Election

ChainCatcher news, Morgan Stanley strategist Michael D Zezas stated that investors' main goal during the U.S. election should be to establish situational awareness and avoid overconfidence regarding the election results and their market impact. Investors may benefit from adjusting their expectations. He noted that the rising probability of a Republican victory implied by the prediction markets has led some to expect a clear result on election night. Morgan Stanley believes this scenario is possible, but not the most likely outcome. Neither candidate appears to be a clear favorite to win the Electoral College, which could lead to a repeat of the prolonged vote counting seen in 2020. Given the poor historical performance of early voting data, Morgan Stanley does not place much importance on these figures and advises against overinterpreting short-term market movements. The firm stated that the market's short-term reactions to elections are often noisy and may not indicate mid-term trends. (Jin Shi)