Morgan Stanley says stocks are due for a period of underperformance in the weeks ahead as valuations hit a ceiling – and shares 3 areas of the market where investors can find returns now

• Stock market valuations currently sit at multi-year highs.
• According to Morgan Stanley’s Chief US Equity Strategist Mike Wilson, stocks have little room left to run, and they appear to be due for a period of underperformance.
• Wilson highlights three areas of the market where investors can find returns in Q1.

US stocks are among the most expensive in the world at the moment.

But according to Morgan Stanley, valuations won’t be getting much higher anytime soon.

Valuations are hitting a ceiling in the near term, and stocks are due for a period of underperformance, says Mike Wilson, Morgan Stanley’s chief US equity strategist.