UBS Wealth Management CIO: Favorable environment may continue to benefit global stocks markets.

UBS Wealth Management Investment Director's Office stated that with further interest rate cuts by the Federal Reserve and growth expected to accelerate in the second half of next year, the current economic environment is favorable for global stock markets. Historically, when the economy is not in recession and the Federal Reserve is cutting interest rates, stocks perform the best. The latest economic data indicates that the current environment is favorable. The current weakness in the US economy may be temporary, and global growth is expected to accelerate in 2026. Strong profit growth expectations should drive further stock market gains. Although global stock valuations are still at historic highs, the valuation premium is mainly due to the growth of high valuation sectors in the benchmark weightings. UBS also believes that profit growth is a more important indicator of future returns, and expects profit growth in major markets next year to be at a steady level of 7%-14%, providing support for short-term gains. "Therefore, with the current favorable environment continuing until 2026, under-allocated investors may consider increasing their stock exposure." UBS is bullish on the US technology, healthcare, utilities, and banking sectors, and believes that "European leaders" are set to benefit from policy and structural growth. In the Asia-Pacific region, UBS is positive on Australia, Japan, and China, especially the Chinese technology sector.