Top 10 investment themes for 2023

Morgan Stanley strategist Edward Stanley identified what he believes are the 10 biggest themes in global markets for 2023. I’ll list all of the themes first before getting to those I find most relevant: ‘Earthshots’, the rise of India as a lucrative investing destination and upcoming obesity drugs.

The 10 themes outside of those three involve downward profit margin pressure, bloated developed world inventory levels creating deflationary pressure, accelerated profit growth for ESG companies, venture capital investment, China re-opening, Saudi Arabian socioeconomic restructuring, and artificial intelligence.

Earthshots is a term Morgan Stanley uses for the more than 50 public companies the firm has identified that have “game-changing sustainability technology.” Mr. Stanley describes the decarbonization process as of right now as lethargic, but he expects the pace to ramp higher.

The report lists cutting edge sustainability companies like Boston-based Ginkgo Bioworks, Codexis Inc., and Oxford Nanopore Technologies PLC from the U.K., along with existing companies he calls ‘enablers’ like Siemens AG, Sunrun Inc., and Occidental Petroleum Corp.

Where India is concerned, the strategist believes that a combination of services offshoring by the developed world, manufacturing investment, the energy transition and the country’s existing advanced digital infrastructure will make India the world’s third largest economy (currently fifth) and stock market (currently eighth) by the end of this decade.

Morgan Stanley expects that India will be responsible for 20 per cent of global GDP growth in the 2020s.

Mr. Stanley sees new obesity drugs from Novo Nortdisk and Eli Lilly with exponential sales growth thanks to social media. He notes that obesity drug Wegovy and diabetes treatment Ozempic are mentioned frequently on social media – particularly TikTok – and the medium’s fixation on fitness and health will help drive sales.

— Scott Barlow, Globe and Mail market strategist

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