11 Mins Ago
Strong market fundamentals justify a further equity rally, UBS says
The S&P 500 may have notched yet another record high on Wednesday afternoon, but Mark Haefele sees no near-term signs of the rally stopping.
“Fixed income remains our most preferred asset class, but we also believe stocks can advance further,” wrote the chief investment officer of UBS Global Wealth Management. “In our base case, we see the S&P 500 reaching 5,500 by year-end amid Fed rate cuts, robust profit growth, and the secular growth trend brought by artificial intelligence (AI).”
Haefele specified that he still expects 50 basis points of rate cuts by the end of the year, starting sometime in September. He added that he is strategically exposed to technology assets, but also sees an opportunity emerging in small-cap names as the U.S. central bank begins to ease monetary conditions.
— Lisa Kailai Han
An Hour Ago
Friday may bring ‘longest stretch of sub-4% unemployment since the early 1950s,’ Deutsche Bank says
Friday’s nonfarm payrolls report for May is forecast by economists to show U.S. unemployment at 3.9%, according to FactSet. If the jobless rate comes in at 3.9% or less, that will prove “the longest stretch of sub-4% unemployment since the early 1950s,” according to a research report this week by Deutsche Bank macro strategist Henry Allen.
U.S. unemployment was below 4% for 27 consecutive months in the late 1960s, but the last time there was a run of 28 months or more was the early 1950s, Allen wrote. “Time will tell if the early-1950s offer a good parallel, but if these similarities do hold, there could be a lot of scope for optimism. In particular, low unemployment has often been a spur to productivity growth, as firms find it more difficult to hire workers and become more focused on helping their existing staff to be more productive. Given the growth of AI in our own time, this suggests there could well be some upside risk to economic growth over the years ahead.”
The early 1950s saw a run of 35 months when unemployment was below 4%. That has never been exceeded since.
— Scott…
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