Morgan Stanley's Fall Playbook: Overweight US Stocks, Avoid 'Bond Proxies'

Despite some recent softening economic data, the U.S. has the world's strongest economy and most profitable companies. That's why the investors should remain overweight U.S. stocks, said Zack Apoian, senior asset allocation specialist at Morgan Stanley Wealth Management (MS) - Get Report . Apoian adds that emerging markets are also on a roll, and should be a part of any portfolio. Apoian is actually bullish on British stocks despite June's Brexit vote. He said the U.K.'s strong fiscal condition grants it significant leverage in negotiations with the EU. Further, he finds the outlook for potentially avoiding recession appears to be improving. On the other hand, he sees Continental European stocks as less attractive, saying risks abound, including a potentially difficult Brexit negotiation, waning support for German Chancellor Merkel, and "potential disruption in banking systems" due to the negative rate environment. As for his fixed income outlook, Apoian sees a continuation of low global rates, so he would overweight equities and fund this with an underweight in bonds, especially avoiding long-duration ones.