Crushed Bond Volatility Has Helped Stocks: Morgan Stanley’s Shalett

The video discusses the resilience of consumers during economic downturns, noting that consumer confidence and sentiment have not deteriorated as much as expected despite job losses. It highlights the temporary nature of shutdowns and the expectation of recovery as people return to work and consumption patterns normalize. Additionally, the video examines the steepening of the 2:30 yield curve and the stability in the bond market, which benefits stock investors.

What has been a surprising factor about consumer behavior during the economic shutdown?

• Rapid job recovery

• Complete loss of consumer sentiment

• Increased consumer spending

• Higher consumer confidence than expected

What is a key factor underpinning the belief that the economic shutdown is temporary?

• Consumer pessimism

• Permanent job losses

• Decrease in consumer spending

• Expectation of returning to normalcy

What significant change has occurred in the 2:30 yield curve recently?

• It has inverted

• It has remained unchanged

• It has steepened by more than 40 basis points

• It has flattened significantly

How has the bond market been described in terms of volatility?

• Increasingly volatile

• Moderately volatile

• Highly volatile

• Volatility has been crushed

What benefit does the stability of the 10-year Treasury provide?

• Higher cost of capital

• Increased bond market volatility

• Decreased consumer confidence

• Assistance to stock investors