About Andrew Saperstein
Andrew Saperstein, Co-President of Morgan Stanley and head of its wealth management division, discussed the firm's growth strategy and market conditions in two CNBC appearances. In September 2022, he described Morgan Stanley's wealth management business as "a category of one" and said acquisitions had made the firm "a powerful player." He stated that the company had grown by $650 billion organically and expected to grow by a trillion dollars every three years, excluding market performance. Saperstein said the firm seeks acquisitions with good strategy and culture fit, and is also interested in integrating innovative fintech and tech organizations into its platform. He described investor sentiment during market volatility as "very rational" and said the role of wealth management is to help clients focus on life goals rather than short-term market moves.
In May 2023, Saperstein expressed a cautious outlook on the economy, citing deteriorating fundamentals. He noted that M2 money supply had been negative for six months, consumer spending was down, credit availability was tightening, and leading economic indicators were dropping, leading him to expect an economic slowdown in the second half of the year. He said the firm had moved cash into bonds and that the market's performance was being driven by a narrow group of mega-cap tech stocks. Saperstein said he did not expect the Federal Reserve to raise rates further, but warned that resolution of the debt ceiling could lead to additional tightening through Treasury issuance and quantitative tightening.
Source: AI-verified profile updated from Andrew Saperstein's recent appearances.
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Transcript (16 segments)
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Interviewer0:10
Partner. He's one of Barron's top financial advisers. We need your advice. Welcome back.
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Andrew Saperstein0:17
Thank you.
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Interviewer0:17
Are you still sitting on a pile of cash?
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Andrew Saperstein0:19
Yes, we are.
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Interviewer0:20
Why are you still so negative in the market?
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Andrew Saperstein0:22
Well, we're not exactly on cash. All the cash has moved into bonds as we spoke about last September. But if you look at the facts on the ground right now, you have M2 negative for six months.
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Interviewer0:36
Money supply. All right.
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Andrew Saperstein0:37
Consumer spending is down. Availability of credit is tightening. Leading economic indicators that prospectively tell what's going on, they're dropping. So we expect the economy to slow in the second half of the year.
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Interviewer0:49
I mean, it's been much more resilient than people have thought. I would assume you included.
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Andrew Saperstein0:53
Mm-hmm.
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Interviewer0:54
The consumer, even though retail sales were slowing, too, and even if we throw up Home Depot's shares, they've come up off the mat from where they were, and other extraneous factors there too.
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Andrew Saperstein1:18
If you look at the performance, the equal weight is flat. It's really been driven by big tech, which is the largest component of the S&P on a cap-weighted basis. The tape really isn't trading too well.
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Interviewer1:33
This has become the issue of the moment: that top-heavy market, right? The mega-caps are pulling the weight of everybody else. So what? So what? Why is it such a big deal?
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Andrew Saperstein1:43
Well, we're overweight big tech, so that plus our other allocated parts of the portfolio. Okay with that. We don't have a problem with big tech pulling the market, but rather because the fundamentals are deteriorating. We had 15 years of free money, quantitative easing, as well as a $5 trillion fiscal push that we're taking — it's a big lag to burn that off. So we're wringing out those excesses. The second half of the year is when we'll start seeing a slowdown.
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Interviewer2:32
You think the Fed's done? They're not raising anymore?
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Andrew Saperstein2:34
Yeah. I don't think so, but keep in mind there's a lot of conjecture about the resolution of the debt ceiling. The debt ceiling will result in a trifecta of tightening. It'll supercharge QT. Here's how it works: Yellen's been burning down the Treasury General Account, the TGA, in not issuing... resolved, which maybe we'll get it, who knows? Yellen will have to rebuild her checking account. It's estimated that she'll be issuing an extra $600 billion worth of Treasuries in the second half of the year. That's a tightening, and combine that with QT, and add that to the banking drama that has...
