Executive Summary
Morgan Stanley's top strategists are positioning for a fundamental shift away from Mag 7 concentration toward sector broadening in 2026, driven by three converging forces: Fed rate cuts, deregulation benefits, and an AI infrastructure spending cycle that extends far beyond tech. The firm's contrarian bet centers on regional banks outperforming money centers as Treasury policy explicitly favors regulated banking over alternative asset managers, healthcare's emergence from a two-year policy overha...
Key Investment Opportunity
The Regional Banking Renaissance
Treasury policy explicitly favoring regulated banking over alternative asset managers creates a structural tailwind for regional banks. Combined with Fed rate cuts, deregulation benefits, and M&A recovery, regional banks are positioned for a catch-up trade versus both money centers and alternative m...
...and 2 more investment opportunities
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