Investing.com — Analysts at UBS argued on Monday that markets could be volatile this week, but the current environment is “supportive” for U.S. stocks, especially thanks to strong investments in artificial intelligence. ”.
Analysts said in a note to clients that the stock could be affected by the Federal Reserve's policy decision expected on Wednesday, as well as the latest U.S. jobs report and earnings report, which accounts for 30% of the benchmark's market capitalization. He said there is.
However, they have seen their stock prices rise due to recent news that Facebook's parent company Metaplatforms (NASDAQ:), Google-owned Alphabet (NASDAQ:), and software giant Microsoft (NASDAQ:) all plan to increase capital spending. He said that the economy should continue to be supported. Their position in the race to develop and ultimately monetize so-called generative AI.
”[W]“U.S. stocks continue to perform well, with AI-related companies expected to drive strong earnings growth over the next few years,” UBS analysts said, adding, “Investors are encouraged to make sound strategic allocations to tech stocks. We believe that it is important, but at the same time, diversified exposure across regions and sectors.”
Meanwhile, analysts say companies in the S&P 500 are “mostly robust and intact,” citing the fact that more than half of S&P 500 companies have reported quarterly profits, and about three-quarters of them beat earnings expectations. We believe the fundamentals will provide further support.
Inflation, which has proven stubbornly rising in recent weeks, is expected to start slowing again, which could lead to a reversal of the Federal Reserve's restrictive monetary policy “later this year.” They added:
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