UBS: U.S. Stock Market Pullback Is Over, Year-End Rally Expected

November 25th: The trading department of UBS Securities announced that the sell-off in the U.S. stock market might have come to a halt, laying the groundwork for a year-end rebound. Last week, the stock market witnessed a sharp decline as investors had doubts about the prospect of the Federal Reserve implementing further easing measures and withdrew from the crowded AI trades. The S&P 500 Index and the Nasdaq 100 Index respectively dropped by about 4% and 7% from their late-October peaks and both fell to near their 100-day moving averages. However, UBS holds the view that with the benchmark indices finding support at this crucial technical level, the selling pressure from systematic funds has significantly eased, and the expectations of the Federal Reserve's rate cut next month seem to be back on track, which paves the way for a stronger future stock market. [Our view is that the current risk-off phase has come to an end, ] Michael Romano, the head of stock derivatives at UBS Hedge Fund Sales, wrote in a report released last Sunday. Romano anticipates that the S&P 500 Index will rise to around 7000 points by the end of the year. He believes that the market shakeout in November has adequately reset positions, creating conditions for further upward movement. The strategist expects that the recent pullback may have brought in a special December, with momentum stocks being ready to perform strongly (these stocks usually experience rapid and significant price fluctuations). (Jinse)