According to Bloomberg News,UBS GroupFrancois Trahan, the new head of strategy for US stocks, just took office and started the big short banner in the circle!
In Bloomberg's latest survey, Trahan is the second-largest respondent to the US stock market's bearishness. Its forecast for the S&P 500 index is 2,550 points at the end of the year, which means that the index will fall further by more than 9% from Monday's closing price. The median forecast of Bloomberg Tracking Strategists was 2,950.
Obviously, Trahan's point of view is quite different from his predecessor. Keith Parker, the former head of UBS's US stock strategy, had predicted that the S&P 500 would be at 2950 by the end of 2019.
Although the S&P 500's 15% rebound so far this year is impressive, Trahan wrote in a May 13 report, “We see it more as a 'risk reversal' rather than a trend reversal. ”
"Oversold conditions combined with improved lead indicators in the first quarter have supported the stock market's recovery in several months," he said in the report. “But to achieve a sustainable rebound, it is necessary to end the downward trend of leading economic indicators since the beginning of 2018 – it seems unlikely that this trend will occur.”
Trahan said that the financial market has not fully absorbed the impact of the Fed's tightening policy, because leading indicators such as the stock market will take about 18 months to reflect the Fed's policies. He said that uncertainty includes the impact of trade and highinterest rateAt zerointerest rateThe role played in the post environment.
He pointed out that investors' risk appetite has declined this year as investors prefer stocks with lower volatility and higher visibility. He said his research is more inclined to larger companies, growth beyond value and stability. He wrote that under this framework,Coca Cola, Alphabet and Merck & Co. Companies will become more attractive.
(Article source: Global Forex Network)