Contrary to popular opinion, U.S. stocks do justify their valuations, says Morgan Stanley
1. Morgan Stanley supports S&P 500 valuations amid fears reminiscent of the dot-com bubble. 2. Economic trends suggest earnings recovery and lower labor costs are boosting profits. 3. Inflation correlates positively with growth, potentially enhancing corporate earnings. 4. Healthcare sector seen as defensive with historically cheap valuations and potential growth. 5. Equity pricing is significantly lower than peak levels in 1999, favoring stocks.