Institutional investors are showing increased confidence in the U.S. achieving a soft landing, according to Morgan Stanley strategists. After over 150 meetings with investors across North America, they observed a significant shift toward optimism, particularly around cyclicals and rate-sensitive stocks. The term “goldilocks” emerged frequently, reflecting expectations of moderate growth and inflation following the Fed’s recent 50 basis point rate cut. Morgan Stanley advises positioning in select cyclicals, tech, and AI stocks, drawing comparisons to the mid-1990s soft landing. Meanwhile, concerns about China’s economy persist despite recent stimulus measures.