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The weakness of the US economy could affect the recovery of emerging markets: Morgan Stanley



While Morgan Stanley has improved its views for equities in emerging economies, the bank warns that a weaker United States could still limit the possible recovery of some of those emerging markets.

"I'm not totally convinced whether or not we see absolute superior performance in the context of a decline in the US, that has not happened many times before and it's not obvious to me that it could happen," he added.

In a report on Sunday, Morgan Stanley improved stocks in emerging economies from "underweight" to "overweight" by 2019.

The investment bank said it expects equities in emerging markets to outperform their US counterparts. That is a change for emerging markets, which have fallen out of favor this year due to an increase in yields on US Treasury bonds, strengthening the dollar and a scale on the Federal Reserve's balance sheet.


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