2024-03-24 15:13:00
Investing.com – UBS analysts expect that stock markets will witness a slight decline in the coming months. This update came following an analysis of the economic situation.
Despite the recent mixed economic signals, investment bank UBS still believes the four main stock market drivers remain largely intact. These factors are strong growth, declining inflation, the Fed’s shift, and unprecedented investment in artificial intelligence.
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The reduction on this date…despite inflation
“The recent ‘hotter’ data may suggest that the Fed may keep interest rates high for longer, but trends in the labor market support our view that the Fed is more likely to start cutting rates in the middle of the year,” UBS said. .
Earnings remain supportive, with Q4 earnings season beating expectations and Q1 2024 guidance in line with historical patterns.
“Although the Big 7 represents a significant portion of EPS growth at present, growth expectations are beginning to expand,” the company added.
The reversal is now awaited
Despite the positives, UBS said that following the more than 20% rise since the October low, some sentiment and positioning indicators point to a modest decline in the coming months.
“Our June 2024 and December 2024 {S&P 500}} price targets are 5,100 and 5,200 respectively. We maintain our neutral preference for US equities in our tactical asset allocation, and stress that there may be better opportunities to add to equity positions.”
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