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Their base-case scenario for 2024 sees equities and bonds both
delivering positive returns, as slowing U.S. economic growth,
falling inflation and lower rate expectations drive yields down,
which should support equities.
The absence of a severe U.S. recession should mean companies can
continue to grow earnings, UBS said.
That scenario sees the S&P500 at 4,700 points at the end of the
year, up from 4,502 as of Wednesday's close the U.S. 10-year
yield at 3.5% - it was at 4.506% on Thursday - and the euro at
$1.12 - last $1.085.
In addition, they expect geopolitics to play an outsized role in
2024 - "The U.S. presidential election, the ongoing Israel-Hamas
and Russia-Ukraine wars, and the rivalry between the U.S. and
China could all affect markets globally. Investors should
prepare for bouts of politically driven volatility and consider
hedges."
(Reporting by Alun John; Editing by Amanda Cooper)
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