Morgan Stanley’s Top Stock Picks and Outlook on US Assets

Morgan Stanley upgraded U.S. stocks and Treasuries to "overweight," citing diminishing tariff risks and a negligible chance of recession.

The firm expects U.S. assets to broadly outperform global counterparts, except for the dollar, due to a slowing global economy.

Top stock picks include Chewy (due to its vet clinic opportunity), Ulta Beauty (driven by improving trends in the beauty sector), and Coupang (benefiting from its competitive advantage in the Korean e-commerce market).

A weaker dollar is expected to benefit U.S. multinational companies by enhancing their income when converted back into U.S. currency.

Morgan Stanley projects the S&P 500 to reach 6,500 points by the second quarter of 2026.

Chart Industries: The merger with Flowserve is expected to boost growth prospects. The stock is up nearly 18% over the past 12 months.

Ulta Beauty: Improving trends in the beauty sector suggest further upside. Shares are more than 22% higher in the last year.

Coupang: Continues to execute well and is relatively insulated from tariff risk. The stock has risen by 40% in the past three months, yet its valuation remains attractive.

Chewy: The launch of its first vet clinic presents a significant growth opportunity in the $40B market.

NuBank: Expected to quickly become a leading player in Brazil's payroll loan segment.

Q: Why is Morgan Stanley bullish on U.S. assets?

Q: What is Morgan Stanley’s outlook on the U.S. dollar?

Q: What S&P 500 target does Morgan Stanley project?

Consider increasing exposure to U.S. equities, particularly in sectors benefiting from easing inflation and a weak dollar.

Evaluate opportunities in high-quality bonds for income and stability.

Hedge against dollar weakness while capitalizing on the expected strength of the euro, yen, and Swiss franc.

Continue to diversify globally to complement domestic holdings.