UBS: FEDERAL RESERVE INTEREST RATE HIKES ARE EXPECTED TO WEAKEN AND STOCK MARKET PROSPECTS ARE PROMISING

ACCORDING TO UBS, THE STOCK MARKET OUTLOOK REMAINED OPTIMISTIC AS THE FEDERAL RESERVE'S INTEREST RATE HIKE WAS EXPECTED TO WEAKEN AS A RESULT OF SOFT DATA. THE VIX INDEX HAS FALLEN TO ITS LOWEST LEVEL THIS YEAR, AND THE MARKET HAS LOWER COST OF EVENT RISK IN THE COMING WEEKS. ACCORDING TO UBS, IMPROVED PROFIT CORRECTION AND REDUCED INTEREST-RATE INCREASES WERE EXPECTED TO SUPPORT THE MARKET RATHER THAN SIMPLY COMPLACENCY. THE BANK EXPECTS THAT FUTURE DATA WILL SHOW CONTINUED DE-INFLATION AND ALLOW THE FED TO EXTEND THE MORATORIUM ON INTEREST RATE HIKES, WHICH WILL REMOVE THE CONTINUING PRESSURE ON RISK ASSETS. WHILE GEOPOLITICAL RISKS REMAIN THE MAIN SOURCE OF VOLATILITY, UBS BELIEVES THAT THEY ARE NOT SUFFICIENT TO UNDERMINE OVERALL MARKET OPTIMISM ALONE。