Morgan Stanley: These three major themes will have a profound impact on the market

In addition to short-term themes, many analysts have begun to focus on long-term themes. Just like in 2023, Morgan Stanley's Head of Public Policy Research once again put forward three key long-term themes at the beginning of this year, believing that these themes will have a profound impact on the market.

On January 8th, Michael Zezas, the Head of Public Policy Research at Morgan Stanley in the United States, wrote that they convened analysts from around the world to assess the current thematic focus and identify future new themes. However, in the end, Morgan Stanley retained two of the three themes from last year, namely AI technology diffusion and decarbonization, while adding a new theme - longevity.

The reason for continuing with the two themes from last year is that Zezas believes that as long-term trends, they will continue and may generate new connotations over time and technological development.

Zezas stated that in order to maintain a leading position in the ever-changing market, it is necessary to learn to grasp these complex long-term themes.

Longevity

With the advent of GLP-1, intelligent chemotherapy, and AI-assisted drug development, innovation in the pharmaceutical field will greatly increase human lifespan, and the theme of "longevity" in the coming years may bring disruptive changes to countless industries.

Morgan Stanley's research believes that in the future, both at the micro and macro levels, various fields including demographics, consumer habits, healthcare systems, government finances, and personal wealth management will be affected by the increased human longevity.

AI Technology Diffusion

Zezas mentioned in his article:

AI has now become a transformative force reshaping various industries, the economy, and our daily lives.

Starting in 2024, companies will learn how to further unleash the potential of AI, individuals will also use AI to improve productivity, and regulators may introduce more measures to address key risks in AI.

From driving disease diagnosis and drug discovery to impacting agriculture, financial services, transportation, and green energy, AI will become a key force in the global technology field and a critical element of corporate business strategies.

In terms of market trends, following the good performance of AI-related stocks in 2023, Morgan Stanley's research suggests that in 2024, investors may be more inclined to invest in companies that apply AI in their businesses.

Decarbonization

Efforts to reduce global carbon emissions continue to impact the market in the following ways:

1. Large-scale capital deployment;

2. Accelerated pace of innovation;

3. Increasingly severe actual risk challenges brought by climate change;

4. Diverse business models provide opportunities to generate alpha.

In addition, the likelihood of carbon emissions exceeding the targets set in countries' climate commitments is increasing. Morgan Stanley's research predicts that investors' attention will shift towards climate adaptability and resilience, with a greater focus on cross-asset areas.