Investing
UBS Global Wealth Management lifts global equities stance to ‘attractive’
Global Banking & Finance Review®
Company
By Siddarth S
(Reuters) -UBS Global Wealth Management has raised its stance on global equities to “attractive” from “neutral”, citing resilient U.S. economic growth, monetary policy easing by major central banks and an artificial intelligence (AI) boom.
“Economic growth is remarkably resilient and central banks have been proactive, giving us confidence the supportive backdrop has more room to run,” UBS analysts said in a note dated Thursday.
Interest rate cuts across major central banks including the U.S. Federal Reserve have primarily boosted the MSCI’s broad world equity index, a benchmark for gauging the performance of global stocks, by 16.3% so far this year.
While the impact of monetary policy easing usually comes with some lag, the start of a rate-cutting cycle has historically been a positive catalyst for equity markets over the subsequent 6-12 months,” UBS said.
More stimulus measures from China will further aid global stocks, the brokerage said, adding that growth across other regions appears to have “bottomed out.
Corporate earnings will benefit from the resilient U.S. economic backdrop that would be further supported by AI, robust labour markets and gradual easing of inflation, UBS said.
Among broader sectors, technology should remain the main engine of earnings growth, even as contributions from others pour in, it said.
U.S. elections are a short-term risk, UBS said, especially if former President Donald Trump is elected, as markets could quickly price in potential tariff risks.
(Reporting by Siddarth S in Bengaluru; Editing by Savio D’Souza and Mrigank Dhaniwala)
Monetary policy is the process by which a central bank manages the supply of money and interest rates to achieve specific economic objectives, such as controlling inflation, consumption, growth, and liquidity.
Economic growth is an increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Artificial intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think and learn. It encompasses various technologies, including machine learning and natural language processing.
Corporate earnings refer to the profits generated by a company after all expenses and taxes have been deducted from total revenue. They are a key indicator of a company's financial performance.
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