UBS: Get Ready for Record-High Stocks

The S&P 500 Index SPX achieved its 26th record close of 2024 on Monday, finishing at an all-time high of 5,360.79 after slight declines on Thursday and Friday. This marks its 26th record close this year, according to Dow Jones Market Data.

The Nasdaq Composite COMP also posted its 14th record close of 2024, climbing 0.4% on Monday, as per FactSet.

U.S. stocks appear to be on track for further record highs, although potential obstacles could arise from surprises in inflation data or outcomes from the Federal Reserve’s upcoming two-day policy meeting, UBS suggests.

A subdued reading from May’s consumer-price index, expected on Wednesday, akin to April’s 3.4% annual reading, would likely bolster investor confidence in a continued disinflation trend, according to Jason Draho, head of asset allocation at UBS Global Wealth Management. Draho indicated that only a significant upside surprise, similar to those in the first quarter, could unsettle this confidence.

Wednesday will also see the conclusion of the Fed’s June policy meeting. No rate cuts are expected, but updates to the Fed’s “dot plot” – the projected path of interest rates – are anticipated. The latest median projection of three rate cuts for this year is expected to be revised down to two cuts for 2024.

Despite a slight rise in the unemployment rate to 4% in May, Draho points to positive economic signs, such as a 6% increase in air travel this year compared to 2023. This suggests that while consumer spending is slowing, it is primarily affecting goods rather than services.


Draho cautioned that any disappointments from the CPI report or the Fed could slow stock momentum but anticipates more all-time highs ahead.

The S&P 500’s current record tally is the highest since 2021, which saw 70 new all-time highs. However, the record to beat remains 1995, with 77 records. The Dow Jones Industrial Average DJIA closed up 0.2% on Monday, while the benchmark 10-year Treasury yield BXincreased by 4 basis points to 4.468%.

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