Premium'Are We There Yet?' Morgan Stanley Maps The Rotational Bear Market Breaking Europe Under The Surface
Look at the STOXX 600 and nothing happened: the index is barely 3% off its all-time high.
Look under the hood, and it's a crime scene. In a new note titled "Are We There Yet?" (available to pro subs), Morgan Stanley's European equity strategist Marina Zavolock and team write that the rotations beneath the surface have reached bear-market proportions, and they have done so across six trades at once: high vs low momentum, AI capex plays vs the "debated disrupted", Strait of Hormuz closure vs reopening, cyclicals vs defensives, bond proxies and the highly levered, and French sovereign risk.