Market volatility due to a number of short squeezes in recent days is just "noise," according to Morgan Stanley analysts, who listed some stock picks that are now in "something of a sweet spot."
Shares of retailer GameStop surged 1,625% in January as retail investors piled into the stock, while hedge funds with short positions made heavy losses. Goldman Sachs called it the most extreme short squeeze of the past 25 years.
Morgan Stanley said that while such volatility is "unsettling," it assessed whether such moves are a signal of change or just internal market dynamics — what it called "noise."
"We are firmly in the latter camp and would treat such periods as more of an opportunity than a threat," analysts led by Graham Secker said in a research note Monday.
The investment bank listed its "sweet spot" European stocks that combine an attractive valuation with good "pricing power" — which means they are likely to be able to raise prices and increase margins while maintaining sales.
"sweet" - Google News
February 02, 2021 at 02:31PM
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Morgan Stanley's 'sweet spot' stocks to cut through GameStop 'noise' - CNBC
"sweet" - Google News
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