Morgan Stanley Ups Target for S&P, America the Beautiful Best in Class

The bookworms at Morgan Stanley are impressed with themselves for predicting greener pastures post BREXIT. They’re upping their base case scenario for the S&P to 2,300 and 2,500 for their super duper boolish upside balls on fire market–+14.7% above current levels.

The rationale is very simple, mind you.

As follows.

Compared to bonds, equities appear attractively priced.

In a world where investors are increasingly worried about liquidity, “70 percent of the global equities that trade $100 million or more each day are in the U.S.”

Earnings per share are expected to grow in the U.S., in contrast to many other major regions.

Investors aren’t expecting a massive move higher for U.S. stocks.

“Most U.S. consumer metrics appear directionally positive (housing, jobs, delinquencies, obligations, confidence, personal spending, etc.); corporate excess seems under control; and low growth is still the base case economic forecast,” he wrote. “With few other attractive investment alternatives, we see the U.S. equity market as the beneficiary of further appreciation.”

The MS analyst, Parker, loves credit card companies who partake in predatory lending and also nefarious biotech companies with nefarious laboratories who bilk the small people for billions with overpriced drugs. Parker finds both these industries ‘compelling.’

He did hedge his profligate manner with a sober assessment on yields, suggesting low yields usually accompany low PEs because, well, things are fucked.

“In the past, extreme real yields, like where we are now at near 0 percent, were associated with lower price-to-earnings multiples because typically these were perceived as riskier regimes where the world was reliant on policymakers and their efficacy,” quipped Parker. “So perhaps the bubble we are all searching for is simply in the belief in policymakers.”

It’s anyone’s fucking guess. Happy Tuesday.