Morgan Stanley: Continue to hold high-quality U.S. stocks

Morgan Stanley strategists say investors should continue to hold high-quality U.S. stocks with steadily improving earnings per share ahead of the earnings season. The team led by Michael Wilson said valuation downgrades have created better entry opportunities for high-quality cyclical stocks. "The relative performance of the financial sector may be the single most important factor determining the short-term direction of the stock market," the report said. As the pullback continues, the range of investment opportunities within quality stocks is expanding.