UBS: The US stock correction is in place, and a rebound at the end of the year is expected

The sell-off in US equities may have come to an end, setting the stage for a year-end rally, according to the trading desk of UBS. Stocks slumped last week as investors cast doubt on the prospect of further easing by the Federal Reserve and withdrew from crowded AI trading. The S & P 500 and Nasdaq 100 are down about 4 per cent and 7 per cent respectively from their all-time highs at the end of October, both falling near their 100-day moving averages.
However, UBS believes that with the benchmark index gaining support at this key technical level, the sell-off of systemic funds has largely subsided, and the Federal Reserve's interest rate cut expectations next month appear to be back on track, the stock market is expected to strengthen in the future.
"Our view is that the current de-risking phase is now over," Michael Romano, head of equity derivatives hedge fund sales at UBS, wrote in a note released on Sunday.
Romano, who expects the S & P 500 to rise to around 7,000 by the end of the year, believes November's market wash has sufficiently reset positions to set the stage for further gains. The strategist predicts that the recent correction may have sent the market into a special December with momentum stocks poised for a strong performance (such stocks typically experience rapid and large price swings). (Jin Ten)