UBS: Optimism in the stock market is reasonable

$UBS Group (UBS.US)$ $S&P 500 Index (.SPX.US)$ The S&P 500 index rose 1.8% last week, the biggest weekly gain since July last year. UBS economists still believe that the optimism in the stock market is reasonable given the strong economic growth and corporate earnings. UBS said that it is expected that supply chain problems will only drag 1% of earnings per share in 2021, which is not serious compared to our 45% profit growth forecast this year. We still believe that the Fed will see through the nature of the current soaring inflation. The average inflation data in the United States shows that the Fed does not need to take action. As the labor market continues to recover, the yield on Treasury bonds is expected to rise to 1.8% this year. This trend has historically been in line with the stock market’s rise.

Article excerpted from the US Stock Research Agenc