Morgan Stanley Says Investors Should Use Cash to Buy U.S. Stocks

Morgan Stanley said Monday that investors should be using cash to buy U.S. stocks, which the firm contended are at their best prices in years.

The firm said that current stock prices already reflect the downturn in the economy and that the best place to invest cash is in the U.S stock market in light of the Federal Reserve's interest rate cut in January and the possibility of more to come.

The firm increased the stock weighting in its global equity model portfolio to 94% from 92%, with the U.S. part increasing to 50% from 48%. The cash allocation was dropped to 6% from 8%.