UBS shifts US stock allocation to neutral amid high valuations
UBS downgraded U.S. equities to neutral on Friday citing high valuations and dollar risks. Strategists expect global growth to favor international markets.
Reporting from Singapore, the financial services firm UBS Group AG has revised its investment outlook, downgrading its recommended allocation for equities in the United States to neutral. The bank suggested that the world's largest equity market is positioned to lag behind international peers as economic growth gains momentum in other parts of the world.
Strategists Andrew Garthwaite and Marc el Koussa identified several catalysts for the decision, including elevated valuations and a lower sensitivity of American corporate earnings to global expansion. They observed that the American market has the lowest operational leverage among major regions, a characteristic that historically leads to underperformance when global growth surpasses 3.5%. The bank currently projects global GDP growth to reach 3.4% in 2026.
