To play this market, the firm recommended a "barbell" of traditional defensive stocks, some select growth opportunities and late-cycle cyclical names.
Take a look below for some of Morgan Stanley's favorite stocks in this slow-growth environment.
1) Traditional Defensives Despite its year-to-date underperformance against the broader market, health care remains Morgan Stanley's preferred defensive sector.
Still, popular consumer food companies Yum Brands and McDonald's are considered growth stocks based on their market cap and volatility.
3) Late-Cycle Cyclicals Several energy companies — including Marathon Oil , Valero Energy and ConocoPhillips — can shine in a late-cycle market environment, according to Morgan Stanley.
Persons:
Morgan Stanley, Andrew Pauker, Pauker, Morgan Stanley's, Fisher, Dr Pepper, Eli Lilly, Devin McDermott, Ravi Shanker
Organizations:
Walmart, Fisher, " Beverage, CenterPoint Energy, Costco, Colgate, Palmolive, Yum Brands, UnitedHealth, Marathon Oil, Valero Energy, ConocoPhillips, Swift Transportation, Defense, Northrop Grumman, Howmet Aerospace, Delta Airlines