UBS maintained its S&P 500 (SP500) year-end target of 5,600 points and 2025 year-end target of 6,000, but did highlight a handful of market tailwinds and headwinds that investors should be aware of as these factors may ultimately sway where the broader market average will land.
Market Tailwinds
- The economy is expected to grow above long-term trend, with limited recession risk.
- Above-average EPS trajectory is expected to continue and broaden.
- Rates and inflation are believed to continue declining.
Market Headwinds
- ISM Manufacturing and Services is below 50.
- GDP forecasts are slowing; economic surprises are negative.
- There are elevated political and geopolitical risks at play.
- Depressed and elevated valuations tend to result in weaker forward returns.
Where Markets Stand
Currently, the benchmark S&P 500 (SP500) trades at 5,644, which is slightly above UBS’ 2024 year-end target.
This suggests that the financial institution sees the index more or less treading water through the remainder of the second half of this year. Furthermore, for UBS to stand correct on its 2025 year-end S&P 500 (SP500) target of 6,000, it would need the index to advance roughly 6.3% from its current level.
For traders and investors looking to track the performance of the benchmark S&P 500 (SP500), they can shift their eyes towards both exchange-traded funds and mutual funds as a proxy for exposure towards the index. Some funds worth examining are: (NYSEARCA:VOO), (NYSEARCA:SPY), (NYSEARCA:IVV), (SSO), (UPRO), (SH), (SDS), (SPXU), (FXAIX), (VFIAX), and (VFFSX).