A chief Wall Street strategist explains why the real story behind the market's rally may be the improving economic data, not the Fed | Markets Insider

Morgan Stanley's Andrew Sheets says the market rally has less to do with the actions of the Fed and is more about economic data trends improving.

The chief cross-asset strategist said in a Morgan Stanley podcast that"the last three months have been one of the best runs of economic data" he's ever seen. "This improvement, rather than any new policy that central banks have been enacting, might be the real story of this summer's strength," he said.

But he called this a"double-edged sword," because if economic data slows in the fall, Fed policy may not be enough to hold markets up.While many economists point to the Fed's low interest rate policy to explain the stock market's rise upward despite the seemingly weak economy, Morgan Stanley's chief cross-asset strategist said he believes better-than-expected economic data may be more responsible.

"As much as the steady rise of markets seems disconnected from the conditions in the real economy, I'd argue that actually they're more closely related. And going forward, that is a double-edged sword," Andrew Sheets said inThe strategist explained that while economic data has been weak, the trend has been improving and numbers have continued to surpass consensus expectations.

Plenty of V-shaped charts out there. reopening

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