With a greater confidence in soft landing, UBS boosts S&P 500 price targets
UBS equity strategists lifted S&P 500 price targets today as they have greater confidence that the Federal Reserve can engineer a soft landing.
Strategists noted that the recent economic data in the United States has been robust.
The labor market is showing signs of cooling, while inflation has continued to show improvement, with the six-month annualized change in both the headline and core personal consumption expenditures price indexes reaching the Federal Reserve's 2% target.
As the Federal Reserve is now signaling that rate cuts may be appropriate in 2024, UBS strategists have decided to revise their outlook and are now anticipating four Fed rate cuts in 2024.
“While this benign outcome is mostly priced into equity markets, we think market gains can extend a bit further,” analysts said in a note.
UBS raised June and December S&P 500 price targets to 4,900 and 5,000, respectively.
Strategists have maintained a neutral preference for US equities in our tactical asset allocation.
“After the strong gains over the last two months, stocks will likely enter a period of consolidation, and there could be more attractive entry points to add exposure to equities,” analysts added.
S&P 500 rose as much as 1.4% on Monday to close at 4,763.54.
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