The bull market will not end even if the Federal Reserve does hike rates in December and financial stocks like Fifth Third Bank (FITB) will lead the way higher, said Daniel Skelly, Head of Equity Model Portfolio Solutions at Morgan Stanley Wealth Management. ‘We do think interest rates going higher will be a catalyst,’ said Skelly. ‘Secondly, Fifth Third has a new CEO, they are consolidating some branches, so we think we have some expenses to come out, some cost-cutting that can also drive earnings growth from here.’ Fifth Third has seen its shares jump almost 5% in the past week, bringing it flat year-to-date. The company’s new CEO, Greg Carmichael, assumed the top-job on November 1st. Skelly is a fan of Microsoft, which has seen its shares rise over 16% so far this year after being rejuvenated under the leadership of CEO Satya Nadella. Skelly said Morgan Stanley’s recent CIO survey results portend increased software investments over the next year and cited Microsoft, in particular, as a key share winner. ‘Companies continue to invest in software and productivity related initiatives,’ said Skelly. ‘Microsoft actually screened very well in that survey work as a share-gainer.’
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