This rare market 'screams' for investors for have a point of view, Morgan Stanley CEO says
With big moves recently in currencies, interest rates, oil, and stocks, investors "can't sit" on their hands, Morgan Stanley (MS) Chairman and CEO James Gorman told CNBC on Thursday.
The market "screams" for participants to have a point of view, Gorman added in an interview on "Squawk Box" from the World Economic Forum in Davos, Switzerland.
See also: 'I'm not a fan of getting rid of Dodd-Frank,' says Morgan Stanley CEO
The execution of promised policies from President-elect Donald Trump will be a key factor, Gorman said, but he argued it's "unlikely" that the economy would grow at a 4 percent pace.
"Four percent would be a massive move," he said. "But if we're at a solid 3 percent growth, I think that's a really good outlook for the U.S."
Gorman said he's not prepared to credit Trump alone for the new feelings of optimism about the economy.
"I don't know that I credit an individual. It's more a credit to a sense of some real positive change that is likely to occur on the economic front," he said, acknowledging it's fair to ask whether this change would have happened if Hillary Clinton had won the presidency.
"But frankly, corporate taxes, tax remediation, infrastructure spend, these are pretty big movers if they actually happen," he said.
While there are many positive forces in the market, "there's [also] a lot to remain cautious about," Gorman said. "The world is getting better, but not in a straight line."
"We've got the second-largest economy in the world, China, going through a major transition," he said. "There is a lot of geopolitical risk in obvious regions, [like] North Korea, parts of the Middle East, [and] what's going on in the refugee crisis in Syria and across Europe."
Gorman also said Morgan Stanley is on track to hit its goals, following Tuesday's release of fourth-quarter earnings and revenue that beat expectations .
Last week Reuters reported the bank laid off several senior investment bankers and cut bonuses by about 15 percent because of a decline in revenue stemming from dealmaking and capital raising across Wall Street.
Chief Financial Officer Jon Pruzan told CNBC recent staff changes were not "cuts" and were part of a normal process of personnel management.
Following last week's better-than-expected earnings and revenue from JPMorgan (JPM), Chairman and CEO Jamie Dimon told CNBC from Davos on Wednesday the stock market could go even higher with the tax and regulatory reforms from Trump .
Trump's inauguration is set for Friday.
Earlier this week from Davos, Bank of America (BAC) Chairman and CEO Brian Moynihan told "Squawk Box" rates have been going up for the right reasons, including rising wages and a growing economy.
BofA reported mixed results last week, with earnings exceeding estimates but revenue falling slightly short of expectations. The bank did say it expects to earn $600 million in additional net interest income in the current quarter.
During a Davos panel discussion Thursday, Moynihan said he's concerned about the structural issues facing Europe, which he predicts could have consequences for BofA.
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