text: MORGAN STANLEY: REAL ESTATE LEAST DESIRED EQUITY SECTOR: In Morgan Stanley’s Annual Investor Survey, respondents said that Consumer Financials and Real Estate are their least desired equity sectors. According to the survey, 58% of investors expect U.S. home prices to lose 10% this year and nearly a third expect housing prices to drop over 15%. Meanwhile, excess debt, rising rates, and credit trends contribute to the worsening outlook for Consumer Financials. “As times get tougher, consumers increasingly will have to prioritize who to pay. Repaying consumer lenders comes after paying for food, shelter, and energy… [W]e expect consumer loan delinquencies and net charge-offs will accelerate over the next several quarters,” analysts write. (Analyst Comment: “The next several quarters” puts us into the middle of 2024, which is a sign that this is unlikely to be a short recession. The average recession lasts about 11 months, so anything less than that would be “short.” Morgan Stanley analysts expect 6% unemployment by the end of 2024. That’s higher than unemployment in 2007 and 2008, though not as high as the 9% unemployment registered in 2009. – M.S.)