Morgan Stanley: Emerging market stocks are far from entering a new long-term bull market.

Morgan Stanley stated that although there are some investment opportunities in emerging market stocks, they have not yet entered a new long-term bull market due to various challenges. "The key argument for holding emerging market stocks lies in diversifying investment risk and the negative correlation with the US dollar, but other assets can provide the same advantages with higher Sharpe ratios," said Morgan Stanley strategists. Emerging market countries also lack clear development prospects like Japan, have relatively high valuations compared to historical valuations, earnings are cyclical, and face geopolitical risks. Throughout the cycle, global investors should at most maintain the same weight in the MSCI Emerging Markets Index as in global stock benchmark indexes. They should prioritize stock selection, especially in the current context of a multipolar world, artificial intelligence and technological diffusion, social change, and the future of energy.