Photo: Bloomberg TV
Jonathan Golub, UBS’s top U.S. equity strategist, just ratcheted up his year-end target on the S&P 500.Over the past two months, the Fed and ECB’s promises of “forever” and “unlimited” have surprised even the market’s most optimistic participants. Based on stock performance following other major central bank announcements, we believe the S&P 500 will drift higher over the near term. As such, we’re raising our year-end price target from 1,375 to 1,525. This implies 4.4% upside through year end.
Golub made no change in his earnings outlook, which he had lowered earlier this month. So, it’s no surprise that he maintains a cautious tone.
While we’re raising our year-end price target, we continue to believe that macro headwinds will hamper stock performance over the intermediate term. These include a coordinated global economic slowdown, weak earnings growth, potential negative side effects from unprecedented monetary easing, the fiscal cliff, uncertain election outcomes, the future of the Euro, and a burdensome regulatory environment. We believe the current market rally will continue until these issues grab headlines once again.
It was only in July that he lowered that target to 1,375 from 1,475.
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