Morgan Stanley's Shalett Still Sees 'Pretty Significant' Earnings Risk

The video discusses the outlook on earnings risk, highlighting the impact of global growth and the S&P 500's reliance on foreign economies. It examines the role of small and mid caps in the slowing US economy, noting the diminishing benefits of tax reform. The discussion shifts to the Federal Reserve's influence on market expectations, with a focus on interest rate hikes and bond market reactions. Finally, the video addresses the need for clarity on the Fed's balance sheet size and its components.

What is a significant factor contributing to the earnings risk for U.S. companies in 2019?

• Technological advancements

• Global economic slowdown

• Rising oil prices

• Increased domestic demand

Why might small and mid-cap companies not be a safe haven despite their lesser dependence on foreign earnings?

• They have high levels of debt

• The U.S. economy is also slowing

• They are subject to stricter regulations

• They are heavily reliant on technology

What has been the impact of tax reforms on small and mid-cap companies?

• They have led to increased foreign investments

• They have caused a rise in interest rates

• They have provided significant benefits

• They have resulted in higher inflation

What is the market's current perception of the Federal Reserve's stance?

• The Fed is planning to reduce its balance sheet

• The Fed is likely to cut rates

• The Fed is on the market's side

• The Fed will maintain current rates

What is a major issue regarding the Federal Reserve's balance sheet?

• It is primarily composed of foreign assets

• There is a lack of clarity on its optimal size

• It is too small to impact the economy

• Its size is clearly defined