Mid-Year Outlook: AI Strength and Energy Shock

Morgan Stanley's Mid-Year Outlook highlights a tug-of-war between AI-driven growth and a potential global recession caused by persistent energy shocks. While constructive on equities, they warn that oil prices hitting $150/bbl would derail the recovery.

Key Takeaways

• 1.The global economy is currently driven by a tension between AI-driven structural growth and a persistent energy shock.
• 2.A severe downside scenario exists where oil prices surge to $150/bbl, likely triggering a global recession.
• 3.Morgan Stanley maintains an overweight position in global equities, expecting robust earnings despite economic volatility.

Table of Contents

• Morgan Stanley Mid-Year Outlook: AI Strength But Continued Energy Shock Will Result In Global Recession
• Our asset allocation recommendation

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