As the U.S. stock markets stabilized Thursday and oil prices rose slightly, Morgan Stanley (MS) Chairman & CEO James Gorman spoke out about his outlook for the global economy and oil investing.
The U.S. economy is not “under fundamental stress,” he told CNBC’s “Squawk Box“ while attending the World Economic Forum in Davos.
“It’s not a perfect picture, and there is some excessive valuation in the markets… no question,” Gorman said. But the employment situation is “phenomenal,” he adds.
“My screen I have at my desk, there’s about 70 stocks that I follow, from energy, financials, consumer, housing, [and] media; every one of them is down precipitously in three weeks,” the executive stated. However, he does not clear reason for the mayhem.
“China is not having a hard-landing here. China is having a natural, mathematical slowdown given the size of the economy,” he explained.
As for plummeting oil prices, that’s been an “absolute shocker,” Gorman says.
Investors – “if they have the stomach over a two-year period” – could do well by going long on the commodity, he adds.
“Supply and demand eventually rebalance. We’ve seen this again and again and again,” explained Gorman. “The question is if you’ve got the stomach to live through this rebalance.”