Table of Contents
- Introduction: From “Sell America” to “Buy America”
- Morgan Stanley’s Bullish Outlook on U.S. Assets
- Key Drivers for U.S. Stock Market Strength
- Why U.S. Bonds Are Still a Safe Bet
- Table: U.S. vs. Global Investment Performance Outlook 2025
- What This Means for Global Investors
- Conclusion
- Sources
Introduction: From “Sell America” to “Buy America”
Just a year ago, global investors were reducing their exposure to U.S. assets. Rising interest rates, slowing growth, and high valuations pushed many portfolio managers to shift capital toward emerging markets and European equities. The phrase “Sell America” was widely used across trading desks.
But in 2025, that narrative has flipped.
In a bold stance, Morgan Stanley has now reversed course, advising investors to double down on U.S. stocks and bonds, asserting they will outperform other global assets throughout the year. The bank argues that macro conditions, earnings resilience, and technological leadership all point to the United States as the most attractive market globally.
Read the full Morgan Stanley research here:
🔗 Morgan Stanley Investment Strategy 2025
Morgan Stanley’s Bullish Outlook on U.S. Assets
In its recent investment note, Morgan Stanley’s Chief Investment Officer Lisa Shalett emphasized that the U.S. economy remains uniquely positioned for sustainable growth amid a complex global backdrop.
“With stable inflation, strong employment, and world-leading innovation, U.S. markets are set to dominate global performance this year,” Shalett wrote.
The firm’s analysts are now overweight on:
- U.S. large-cap stocks
- Treasury bonds, especially in the 5–10 year duration range
- Sectors driven by AI, infrastructure, and green energy
Key Drivers for U.S. Stock Market Strength
Several factors are contributing to Morgan Stanley’s conviction:
1. AI-Driven Growth
U.S. tech giants continue to lead the world in artificial intelligence development, cloud computing, and advanced semiconductors. Companies like Microsoft, Nvidia, and Amazon have shown strong revenue expansion backed by AI demand.
2. Resilient Corporate Earnings
According to FactSet, over 78% of S&P 500 companies beat earnings estimates in Q1 2025, showing robust performance in financials, tech, and energy.
3. Macroeconomic Stability
U.S. GDP is projected to grow at 2.1% in 2025, far exceeding expectations in the EU and emerging markets. Inflation has stabilized near 2.5%, allowing the Federal Reserve room to pause rate hikes.
Why U.S. Bonds Are Still a Safe Bet
Despite concerns over long-term debt sustainability, Morgan Stanley says U.S. Treasuries remain a global anchor for portfolio safety and stability.
Key points include:
- Attractive real yields relative to global sovereign debt
- Liquidity and depth unmatched by any other bond market
- Lower credit risk than comparable bonds in Europe or Asia
For investors worried about volatility or a global slowdown, U.S. bonds provide a reliable hedge with consistent income generation.
Table: U.S. vs. Global Investment Performance Outlook 2025
| Asset Class | YTD Performance (May 2025) | Forecasted 2025 Return | Volatility Level | Morgan Stanley Rating |
|---|---|---|---|---|
| U.S. Large-Cap Equities | +8.9% | 12% | Moderate | Overweight |
| U.S. Treasuries (10-Year) | +2.7% | 4–5% | Low | Overweight |
| European Equities | +3.1% | 5–6% | Moderate-High | Equalweight |
| Emerging Markets | +1.5% | 3–5% | High | Underweight |
| Global Real Estate | -0.4% | 2–3% | High | Underweight |
Source: Morgan Stanley Global Investment Strategy, Bloomberg, FactSet (May 2025)
What This Means for Global Investors
1. Rebalancing Opportunity
Investors with a high allocation to non-U.S. markets may consider rotating funds back into U.S.-centric ETFs and funds. Core positions in S&P 500 index trackers, AI-focused funds, and intermediate-duration Treasuries offer strategic upside.
2. Avoiding Chasing Trends Abroad
While international diversification is essential, chasing returns in underperforming economies like China or parts of Latin America may add unnecessary risk. Morgan Stanley advises maintaining a core U.S. allocation for stability and growth.
3. Long-Term Tailwinds
Structural advantages like a deep capital market, strong consumer demand, and technological leadership make the U.S. an ideal base for long-term portfolio construction.
Conclusion
The “Sell America” mantra no longer holds. In fact, according to Morgan Stanley, the U.S. is poised to lead the world both in equity returns and bond stability in 2025. With corporate earnings outperforming, innovation surging, and macro fundamentals stabilizing, the United States offers the strongest case for capital allocation this year.
For global investors looking for dependable growth and manageable risk, it may be time to pivot back toward American markets and stay there.
