Morgan Stanley's 16% US Profit Drop Stuns Stock Market.

Morgan Stanley predicts that a sudden drop in corporate earnings will halt the US equity rally, with earnings per share for the S&P 500 set to drop 16% this year. The investment bank recommends an overweight position in developed-market government bonds, including long-dated Treasuries, and the dollar. Morgan Stanley is bullish on equities in Japan, Taiwan, and South Korea. The bank also recommends defensive stocks and additional tier-one securities for yield-hungry investors.