Morgan Stanley's Mike Wilson said investors worried about rising interest rates and oil prices should prefer higher-quality US stocks and use energy stocks to hedge their portfolios while avoiding 30-year US Treasury bonds. In an interview on Wednesday, Wilson said, “Don't fool yourself; the S&P 500 is still the highest quality stock market in the world. So if you're nervous, hold the S&P 500.” He added: “Don't hold long-term bonds. The performance of long-term bonds over the past five years has been nothing short of a disaster.” Wilson's optimism about energy stocks also highlights the dual role of this industry. On the one hand, the rebound in crude oil prices has heightened concerns about inflation and put pressure on US treasury bonds; on the other hand, oil companies' stock prices have clearly outperformed the market since June. From June 1 to Tuesday, the S&P 500 energy index rose 13%, far higher than the S&P 500 index's 1% increase over the same period. Wilson, who is the chief US equity strategist and chief investment officer at Morgan Stanley, also pointed out that domestic energy production in the US can isolate the supply shocks faced by Europe and Japan to a certain extent.

Morgan Stanley's Mike Wilson said investors worried about rising interest rates and oil prices should prefer higher-quality US stocks and use energy stocks to hedge their portfolios while avoiding 30-year US Treasury bonds. In an interview on Wednesday, Wilson said, “Don't fool yourself; the S&P 500 is still the highest quality stock market in the world. So if you're nervous, hold the S&P 500.” He added: “Don't hold long-term bonds. The performance of long-term bonds over the past five years has been nothing short of a disaster.” Wilson's optimism about energy stocks also highlights the dual role of this industry. On the one hand, the rebound in crude oil prices has heightened concerns about inflation and put pressure on US treasury bonds; on the other hand, oil companies' stock prices have clearly outperformed the market since June. From June 1 to Tuesday, the S&P 500 energy index rose 13%, far higher than the S&P 500 index's 1% increase over the same period. Wilson, who is the chief US equity strategist and chief investment officer at Morgan Stanley, also pointed out that domestic energy production in the US can isolate the supply shocks faced by Europe and Japan to a certain extent.