UBS on the Fed (September cut coming) and S&P 500 (target 6200)

UBS analysts are looking for he S&P 500 to reach 5,900 by year-end and 6,200 by June 2025.

Reasoning (in summary):

• Federal Reserve officials are confident that rate cuts may soon be appropriate
• At Jackson Hole Fed Chair Powell is expected to provide guidance on the Fed’s future actions as it moves away from its restrictive policies. If not, the updates and decisions in September should offer more clarity.
• Fed expected to front-load interest rate cuts, possibly easing rates at each of its three remaining meetings in 2024, with the potential for a 50-basis-point cut if the labor market or consumer spending weakens significantly.
• Historically, rate cuts in non-recessionary periods have been positive for stocks, with the S&P 500 typically rising by 17% in the 12 months following the first cut.
• strong economic and earnings fundamentals

Powell speaks at 10am US Eastern time on Friday, August 23, 2024

This article was written by Eamonn Sheridan at www.forexlive.com.