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UBS downgrades weighting on US equities to neutral
UBS cut U.S. equities to neutral citing high valuations, weaker dollar risks, and fund shifts to foreign markets; U.S. stocks still make up over 70% of global MSCI index.
- On Friday, UBS cut its recommended allocation to U.S. equities to neutral as Andrew Garthwaite downgraded them to benchmark, citing fading outperformance drivers.
- UBS strategists said the move stems from structural differences in earnings sensitivity, citing the U.S. market's low operational leverage and lower earnings sensitivity to global growth at 3.4 per cent.
- UBS finds U.S. valuations notably stretched versus global peers, with the sector-adjusted price-to-earnings ratio 35% above international peers while the MSCI World ex-US index gained about 8% in 2026.
- ETF flows show diversification is happening, and North America marketing suggests funds will go global, while UBS strategist Sean Simonds set a 7,500 year-end target for the S&P 500.
- A weak dollar and UBS's forecast of the euro at $1.22 last year raise central currency risks for U.S. assets, with a 10% fall in the trade-weighted dollar index typically causing roughly 4% U.S. underperformance.
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Wall Street is under pressure: while global investment funds are increasing billions, US equity funds are experiencing outflows.
·Düsseldorf, Germany
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Total News Sources13
Leaning Left0Leaning Right3Center3Last UpdatedBias Distribution50% Center, 50% Right
Bias Distribution
- 50% of the sources are Center, 50% of the sources lean Right
50% Right
C 50%
R 50%
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