Investing.com — UBS analysts consider that market fundamentals will quickly regain their position as main drivers of market path, following the heightened volatility surrounding the upcoming U.S. presidential election.
“Once the dust settles,we think fundamentals should reclaim their spot in the driver’s seat, determining the market direction,” UBS acknowledged.
The financial institution highlights the resilience of the U.S. economic system, citing current labor knowledge. The Job Openings and Labor Turnover Survey (JOLTS) confirmed job openings falling to 7.4 million in September, the bottom since January 2021, suggesting that the labor market is cooling however stays secure.
UBS additionally famous that this week’s key knowledge releases, together with the PCE inflation gauge, GDP, and the Employment Price Index, will supply additional insights into financial well being.
“Recent data suggest the U.S. economy is stronger than previously thought, and the broad disinflationary trend remains intact,” UBS added.
UBS expects the Federal Reserve to proceed with coverage easing, forecasting a 25-basis-point fee minimize at its 7 November assembly. “We expect 50 basis points of rate cuts for the rest of this year and a further 100 basis points of easing in 2025,” the financial institution mentioned, noting that such cuts throughout non-recessionary intervals have traditionally supported fairness markets.
Wanting forward, UBS stays optimistic in regards to the outlook for tech shares, notably in AI.
“Early results from key semiconductor names pointed to healthy and sustainable AI demand,” UBS famous. Alphabet (NASDAQ:)’s sturdy cloud progress and elevated capital expenditures, together with upcoming stories from different tech giants, additional underscore the optimistic tech outlook.
UBS maintains its “Attractive” ranking on U.S. equities, forecasting the to succeed in 6,600 by the top of 2025, as financial energy, disinflation, and AI investments create a good surroundings for danger belongings.
