UBS Global Wealth Management is optimistic about the future of US equities and the growth of artificial intelligence (AI) by 2025. The firm believes that political changes, transformative innovations, and a favorable interest rate environment will contribute to a strong stock market performance.
UBS GWM is particularly bullish on US technology firms, utilities, and the financial sector, which are expected to benefit from AI. Other wealth managers, including Goldman Sachs Asset Management and Pictet Asset Management, also favor US equities due to strong earnings and the economic policies associated with the Trump administration.
UBS GWM recommends diversified investment strategies in Asia and Europe. They suggest capturing potential growth while managing risks by having exposure to Asia, excluding Japan. The firm highlights the importance of exports from Korea and Taiwan in global supply chains and believes they are less likely to be impacted by tariffs. UBS GWM also sees potential in India and China's internet stocks. In Europe, they see opportunities in small- and mid-cap stocks within the eurozone and high-quality dividend stocks in Switzerland. Investment-grade bonds are also seen as an attractive option for yields and capital gains as central banks continue to cut rates.
UBS GWM acknowledges that the macroeconomic landscape is poised for transformation, particularly with the anticipated policies of US president-elect Donald Trump. They warn that tariffs could disrupt trade and contribute to inflationary pressures, but negotiations with trading partners and legal challenges could mitigate these effects. Tax cuts and deregulation are expected to support a more favorable market narrative. In Asia, UBS GWM forecasts a slowdown in China's growth but expects stronger growth in India and Indonesia. Ongoing tensions between the US and China may lead to increased investment in other parts of Asia.
UBS GWM identifies several sectors poised for growth, including gold and transition metals, as demand rises in response to increased investment in power generation, storage, and electric transportation. They also see opportunities in real estate investments, particularly in logistics, data centers, and multifamily housing. The firm believes that the integration of artificial intelligence could be one of the most influential innovations of the century, driving higher growth and inflation.