U.S. stocks have rallied since the election, but it's time for investors to start thinking about getting out, possibly timed for President-elect Donald Trump's inauguration, Morgan Stanley said.
"We are worried that there is arrogance in telling people that they should be worried, but to stay bullish for now," Morgan Stanley said in a note dated Tuesday.
"Part of us thinks we should just sell the inauguration. After all, what incrementally positive and exciting outcomes could be produced in the first few weeks after that?"
The U.S. banking giant's research arm noted that it had remained optimistic on U.S. equities for several years, even as it expected low earnings growth and some valuation-multiple expansion. But now, it expects "material" earnings growth and multiple contraction.