MS Weekly US PB Mkt Clr Summary 2013.03.18

1. PRIME BROKER AGE – STR ATEGIC CONTENT GROUP
(pbcontent@morganstanley.com)
John.Schlegel@morganstanley.com
Anne.McNerney@morganstanley.com
U.S. Weekly Market Color Data as of March 15, 2013
This memorandum is not a product of Morgan Stanley’s Research Department and you should not regard it as a research report. For Institutional Use Only.
Unless otherwise indicated, aggregated information provided in this document is sourced from filtered Morgan Stanley & Co. U.S. Prime Brokerage data.
ETF Selling Increased Late Last Week as S&P Neared 2007 Highs
ETF selling increased last week, particularly on Thursday and Friday as the S&P 500 closed within 2 points of its
2007 high on Thursday. Selling of ETFs was led by Equity L/S and Multi‐Strat / Macro funds mostly via shorts added
rather than longs reduced. Following two consecutive weeks of strong buying, single‐name activity was mixed last
week; by number, more funds were buyers than sellers, but in aggregate, the activity was slightly skewed towards
selling.
By sector, only 4 of the 10 GICS sectors were bought last week after 8 had been the previous week. Discretionary
was the most net bought last week, which made it the most net bought sector for three consecutive weeks. Due to
the recent buying, net exposure to Discretionary is back at its highest levels of the last few years, with similar
levels last seen in early November 2012. Buying has mostly been driven by the long side over the past few weeks,
with buying broadly seen across industry groups. Financials was the most sold sector last week, which follows two
weeks of buying and was split between longs sold and shorts added. Despite last week’s selling, net exposure to
Financials remains near its highs of the past few years.
After reaching levels not seen since mid‐2007, median Equity L/S gross leverage decreased slightly in the second
half of last week, but remains near multi‐year highs. Due to the selling, median net leverage also pulled back a
little from 59% to 57% last week, based on 1‐day figures.
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal,
financial or any other kind of advisor) and is not acting in a fiduciary capacity. 1

2. ETF Selling Picked Up Last Week, Particularly on Thursday and Friday
Single-Nam e Net Activity Spread S&P 500 ETF Net Activity Spread S&P 500
20 1600 30 1600
1550 20 1550
10
1500 10 1500
0 1450 0 1450
1400 (10) 1400
(10)
1350 (20) 1350
(20) 1300 (30) 1300
12/21 1/4 1/18 2/1 2/15 3/1 3/15 12/21 1/4 1/18 2/1 2/15 3/1 3/15
Spread Average S&P 500 (RS) Spread Average S&P 500 (RS)
Source: Morgan Stanley Prime Brokerage
Note: Net Activity Spread is the difference between the % of clients that were net buyers and the % that were net sellers, based on weekly data.
After Weeks of Buying, Aggregate Single‐Name Activity was Slightly Skewed Towards Selling Last Week
Cum ulative Single-Nam e Net Trading (%) S&P 500
10 1600
8
1550
6
1500
4
1450
2
1400
0
1350
(2)
Cumulative Net Trading S&P 500 (RS)
(4) 1300
12/18 1/3 1/17 2/1 2/15 3/4
Source: Morgan Stanley Prime Brokerage
Note: Cumulative Net Trading represents net buying / selling of single-
name equities taken as % of average aggregate net exposure for the
period. Data is aggregated across all US clients.
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal,
financial or any other kind of advisor) and is not acting in a fiduciary capacity. 2

3. Consumer Discretionary Net Exposure Back at Highs Following Recent Buying
U.S. Sector Net Exposures as % of Total Gross Exposure (%)
7
6
5
4
3
2
1
Cons Disc Financials
0
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13
Source: Morgan Stanley Prime Brokerage, U.S. data as of Mar 15, 2013
Gross and Net Pull Back Slightly Last Week; Gross Still Near Multi‐Year Highs
US Equity L/S Median Gross and Net Leverage vs. S&P 500
S&P 500; Gross Exp / Equity (%) Net Exp / Equity (%)
170 100
160 90
150 80
140 70
130 60
120 50
110 40
S&P 500 x 0.1 (e.g. 130 = 1300) (LS) Gross Leverage (LS) Net Leverage (RS)
100 30
1/1/10 4/1/10 7/1/10 10/1/10 1/1/11 4/1/11 7/1/11 10/1/11 1/1/12 4/1/12 7/1/12 10/1/12 1/1/13
Source: Bloomberg, Morgan Stanley Prime Brokerage, Data as of Mar 15, 2013
Note: Gray lines represent 1-day median figures w hile colored lines represent 5-day averages of daily medians.
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal,
financial or any other kind of advisor) and is not acting in a fiduciary capacity. 3

4. Additional Highlights
 Volumes: decreased 2% week/week to 5% below the 60‐day average
 Sectors: 4 were net bought and 6 were net sold last week
o Consumer Discretionary was the most net bought sector last week followed by Consumer Staples
 While buying was seen broadly across industry groups, Consumer Services led the buying in
Discretionary last week
 Media, which has been the most net bought YTD, saw buying slow week/week
o Financials was the most sold sector followed at a distance by Energy and Materials
 Insurance was the most net sold industry group within Financials and has been net sold in
each month this year
 Leverage: US Equity Long / Short leverage update (based on median account and 5‐day average)
o Gross was unchanged at 160% W/W; net was unchanged at 59% W/W
Source: Bloomberg, Morgan Stanley Prime Brokerage, U.S. data
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal,
financial or any other kind of advisor) and is not acting in a fiduciary capacity. 4

5. U.S. Weekly Market Color Charts (page 1 of 2) Data as of March 15, 2013
US Equity L/S Gross and Net Leverage Cumulative Single-Name Net Trading (%) S&P 500
Gross Exp / Equity (%), S&P 500 (Idx to 100) Net Exp / Equity (%) 10 1600
170 110
160
8
160 100 1550
150 90 6
1500
140 80
4
130 70 1450
120 60 2
59 1400
110 50
0
100 40
1350
Gross Lev Net Lev S&P 500 (2)
90 30
Cumulative Net Trading S&P 500 (RS)
Gross 52Wk High/Low Net 52Wk High/Low
80 20 (4) 1300
12/18 1/3 1/17 2/1 2/15 3/4 12/18 1/3 1/17 2/1 2/15 3/4
* "Leverage levels" are defined as 5-day averages of daily medians and are delta- * Cumulative Net Trading represents net buying / selling of single-name equities
adjusted. YTD and/or most recent leverage levels can be made available regularly taken as % of average aggregate net exposure for the period. Data is
upon request. S&P 500 is a 5-day rolling average indexed to 100 at the start of the aggregated across all US clients.
period.
Cumulative Net Trading by Sector
Short Term (Grid Line Chg = 2%) Long Term (Grid Line Chg = 4%)
Cons Disc Cons Disc
Cons Staples Cons Staples
Energy Info Tech
Industrials Utilities
Utilities Materials
Info Tech Industrials
Health Care Energy
Telecom Health Care
Materials Telecom
Financials Financials
3/4 3/6 3/8 3/12 3/14 12/18 1/3 1/17 2/1 2/15 3/4
* Cumulative Net Trading by Sector represents sector level attribution of Cumulative Net Trading. The same filters apply as in above chart.
Sector Gross Exposures (%) Sector Net Exposures (%)
20 7 35
18 6 30
16 25
5
14 20
4
12 15
3
10 10
2
8 5
6 1 0
4 0 -5
12/18 1/3 1/17 2/1 2/15 3/4 12/18 1/3 1/17 2/1 2/15 3/4
CD CS Energy Fin CD CS Energy Fin Total NMV (RS)
HC Indus IT Mat ETF & Other HC Indus IT Mat ETF & Other (RS)
* Sector gross and net exposures are taken as % of the total gross exposure across all sectors. The charts are 5-day rolling averages.
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal, financial or any
other kind of advisor) and is not acting in a fiduciary capacity.

6. U.S. Weekly Market Color Charts (page 2 of 2) Data as of March 15, 2013
Single-Name Net Activity Spread S&P 500 ETF Net Activity Spread S&P 500
20 1600 30 1600
1550 20 1550
10
1500 10 1500
0 1450 0 1450
1400 (10) 1400
(10)
1350 (20) 1350
(20) 1300 (30) 1300
12/21 1/4 1/18 2/1 2/15 3/1 3/15 12/21 1/4 1/18 2/1 2/15 3/1 3/15
Spread Average S&P 500 (RS) Spread Average S&P 500 (RS)
* Net Activity Spreads measure the breadth of clients who net bought (>0) or net sold (<0) single-name equities or ETFs.
Daily Gross Volume Index Weekly Volumes vs. 60 Day Average (%)
150 20
10
125
0
100
-10
-20
75
-30
50
-40
Daily 20D Avg 60D Avg
25 -50
12/18 1/3 1/17 2/1 2/15 3/4 12/21 1/4 1/18 2/1 2/15 3/1 3/15
*All data indexed to 60-Day Average *Weekly Volumes reflect average daily volume for the week
Top 50 Longs by Sector Top 50 Shorts by Sector
50 1 0 1 1 0
1 0
1 0
1 50
1 1 2 4 3 3 3 3 4 4
1 1 1 0
1 0 0
Legend for Long
15 14 14 and Short
15
40 15 16 40 12 13 12 Charts
16 14 14 13
13
Utilities
Telecom
3 4 4
1 3 4 4 3 Materials
1 2 4
30 30 4 3
5 5 3 3 4 3 Info Tech
5 3 3 2
6 3 1 3
0 1 3 Industrials
5 4 1 1
7 Health Care
7 8 7 1
9 8
8 9 7 Financials
1 9 10 9
20 7 20
2 2 7 ETF
2 2
1 6 2 2
5 1 5 2 Energy
1 3 2
5 4 3 3 3
4 3 Cons Staples
4 4
4 3 3
4 3 Cons Disc
10 4 4 3 2 10 3
13 14 13
10 10 12 11
9 8 8 8 9 9 10
0 0
12/21 1/4 1/18 2/1 2/15 3/1 3/15 12/21 1/4 1/18 2/1 2/15 3/1 3/15
The information contained herein is not intended to be, and does not constitute, advice from Morgan Stanley. Morgan Stanley is not your advisor (municipal, financial or any
other kind of advisor) and is not acting in a fiduciary capacity.

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