Morgan Stanley: Buy these 38 stocks that will increase their profits during another better-than-feared earnings season

• Earnings are down less than feared in Q2, but the beats haven’t stopped negative forward revisions.
• Falling inflation may prevent companies from exercising pricing power.
• Here are 38 stocks that will revise earnings estimates higher, according to Morgan Stanley.

US stocks continue to steadily rise as earnings exceed low expectations once again.

Corporate profits are on pace to fall 9% through roughly a fifth of the Q2 earnings season, which is about 6 percentage points better than anticipated, according to Morgan Stanley. Strategists at the firm also pointed out that sales are tracking flat after beating by 2 percentage points so far.