MarketWatch writes, "Once offering the worst return on Wall Street, cash is now looking like the best asset to own, says Morgan Stanley." The article says, "​Stock sellers are picking up where they left off on Friday, as the market appears to be waking up from its August slumber with a vengeance.... That brings us to our call of the day from Morgan Stanley strategist Andrew Sheets who says investors should consider cash as a viable investment strategy, even if that hasn'​t seemed like such a winning proposal in the past. 'Holding cash ... was an explicitly defensive decision for much of the last 12 years. Of course it offered a worse return than anything else in the market,' Sheets told clients in the bank'​s Sunday note." "But the idea that holding cash means paying for insurance is no longer accurate," said Sheets, who notes that U.​S. 6-​month Treasury bills yields (​3.​1%) are the highest since late 2007, offering 157 basis points more than S&​P 500 dividends, 21 basis points more than 10-​year Treasurys, and just 60 basis points under the U.​S. aggregate bond index AGG." "For USD investors, cash has ceased to be a material drag on a portfolio'​s current yield," he said. Even holding cash in Europe, which used to be extremely costly, is no longer, as German 6-​month bill yields are positive for the first time since 2014." MarketWatch comments, "Streets said that on a cross-​asset basis, U.​S. dollar cash offers a high current yield, liquidity, and a better 12-​month total return than Morgan Stanley'​s own implied forecasts for U.​S. equity, U.​S. Treasurys, investment grade and high yield credit -- '​with considerably less volatility.'" The brief adds, "This is why Morgan Stanley'​s core optimized fixed-​income portfolios are overweight short-​dated fixed income, he said. Against other currencies the dollar also holds up, and the bank'​s foreign exchange experts see more of that strength ahead, especially against the euro, which was once again tapping parity on Monday as worries over Europe winter fuel shortages build."

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