Morgan Stanley recommends buying U.S. assets, but excluding the dollar

Morgan Stanley has upgraded its rating on U.S. stocks and government bonds from neutral to overweight, noting that while global economic growth is slowing, it remains in expansion, and the market's expectations for Federal Reserve rate cuts are insufficient. It predicts that, given corporate earnings revisions are nearing a bottom and the U.S. dollar is weakening, the S&P 500 index is expected to reach 6,500 points by the second quarter of 2026, while the yield on 10-year U.S. Treasury bonds is expected to decline to 3.45%. The report adds that as "U.S. interest rates and economic growth converge with other countries," the dollar is likely to continue weakening