A rotation trade from cash and bonds into stocks could push S&P 500 6500: UBS
In a note to clients Tuesday, UBS analysts highlighted the potential for a significant rotation trade that could propel theto 6500. They state that this shift from cash and bonds into stocks hinges on maintaining an ideal macroeconomic environment.surged by 7.6% after a modest 0.9% rise in 1H24. Regional banks and non-profitable tech stocks also saw significant gains.
They state that recent data has been encouraging, with inflation below expectations and disinflation trends continuing due to declining shelter inflation. However, UBS warns that investors might be overly optimistic about the extent of Fed rate cuts. The market currently prices in 65bps of cuts this year, including a likely September cut, and over 100bps in 2025. UBS says this is aggressive if growth remains around 2% and inflation above 2%. They emphasize that only an ideal macro environment can sustain the rotation trade.
Despite the market rotation, UBS maintains its core investment strategy: positioning for lower rates, focusing on quality growth stocks, and leveraging AI opportunities. They project a year-end S&P 500 target of 5900, with a bull case of 6500, driven by"immaculate disinflationary growth" and sustained high productivity growth, particularly from AI advancements.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
UBS: Political iceberg hits the market– UBSThe UK general election result is now clear (for the benefit of US readers, many countries are able to get a definitive result within hours of voting having concluded).
Read more »
UBS lifts its S&P 500 price target to 5,900, doesn't rule out a move to 6,500UBS lifts its S&P 500 price target to 5,900, doesn't rule out a move to 6,500
Read more »
Nasdaq Could Spur Swing Trade Opportunity, S&P 500 Remains Prone to More SellingStocks Analysis by Declan Fallon covering: S&P 500, US Small Cap 2000, iShares Russell 2000 ETF, NASDAQ Composite. Read Declan Fallon's latest article on Investing.com
Read more »
Stock Market Today: S&P 500 ekes out win as Micron slump weighs; inflation eyedStock Market Today: S&P 500 ekes out win as Micron slump weighs; inflation eyed
Read more »
Stock Market Today: S&P 500 gains as Amazon jumps to join $2T club for first timeStock Market Today: S&P 500 gains as Amazon jumps to join $2T club for first time
Read more »
Stock futures are little changed after S&P 500 ends 3-day decline: Live updatesThe broad market index and the Nasdaq Composite snapped a three-day losing streak on Tuesday.
Read more »