Investing.com -- Morgan Stanley analyst Michael Wilson is growing more constructive on economically sensitive sectors, pointing to improving earnings revisions across Consumer Discretionary, Transportation and Financials as a sign that the cyclical recovery is broadening.

Consumer Discretionary Goods has outperformed the S&P 500 by roughly 6% over the past two weeks as yields and crude oil pulled back from recent highs.

Wilson said earnings revisions for the group have begun inflecting higher again and that lighter positioning had set the stage for a catch-up trade once yields eased modestly.

Within Industrials and Financials, Morgan Stanley said "the risk/reward is greatest in the most economically sensitive areas of each sector," specifically Road/Rail stocks within Industrials and Regional Banks within Financials.

The bank cited a recent trucking survey from its Transportation analyst showing notable strength in rate expectations as capacity tightens under new regulation, and noted that Transportation earnings revisions breadth has surged to its highest level since 2022.

Wilson noted that this metric correlates closely with the ISM Manufacturing PMI and points to a rebound in that gauge toward the mid-to-high 50s over the coming months.

On Regional Banks, Morgan Stanley flagged four tailwinds, including an early-cycle macro backdrop, high-single-digit commercial and industrial loan growth, the steepest yield curve in four years and an easier regulatory environment.

Morgan Stanley’s Banks analyst Manan Gosalia holds Overweight ratings on Huntington Bancshares, Prosperity Bancshares, Fifth Third, Citizens Financial, Zions Bancorporation and CBC.

Morgan Stanley's momentum screen also flagged Amazon, Oracle and UnitedHealth Group as large-cap names showing near-term price momentum with potential to enter the longer-term momentum factor.