{
}
UBS strategists, led by Andrew Garthwaite, warn that a 5% yield on the US 10-year Treasury could signal a negative shift for equities, with a 35% chance of a stock market bubble emerging if bubble areas exceed 30% of global market cap and P/E ratios hit 45x or higher.Currently, the "Mag 6" tech stocks have a P/E ratio of 34x. UBS forecasts a decline in US bond yields to 4.25% by year-end, recommending a defensive investment strategy focused on undervalued sectors like utilities and real estate, while remaining underweight on non-financial cyclicals.
UBS strategists, led by Andrew Garthwaite, warn that a 5% yield on the US 10-year Treasury could negatively impact equities, with a 35% chance of a stock market bubble emerging. They recommend focusing on defensives with low financial leverage and suggest UK bond-sensitive sectors are currently undervalued. The team anticipates US bond yields will drop to 4.25% by year-end, while highlighting Japan as the best-performing region amid rising TIPS yields.
UBS strategists warn that a 5% yield on 10-year US government bonds could indicate a turning point for equities, with a 35% chance of an equity bubble forming. They recommend underweighting non-financial cyclical stocks and favor defensive stocks with low financial leverage, particularly in the UK, where they see opportunities in utilities and real estate.
UBS has maintained a "Buy" rating on Eon with a target price of 16.20 euros. Analyst Mark Freshney noted that the European utility sector has lagged behind the market due to rising bond yields and concerns over capital needs, despite stable earnings momentum and low valuations that suggest growth potential. Freshney's top picks include Iberdrola, Eon, National Grid, and SSE, while he holds a negative outlook on Severn Trent, Uniper, and Verbund.
UBS Global Research has upgraded SSE plc's stock rating to "buy" from "neutral," citing stronger fundamentals and growth in its transmission business. Despite a 13% decline in shares due to rising interest rates and delays in the Dogger Bank offshore wind project, SSE's focus on regulated investments and capital expenditures is expected to enhance earnings per share significantly by 2031. The Berwick Bank offshore wind project, pending approval, could further add substantial value, while SSE's thermal generation assets may rebound as market conditions improve.
UBS has upgraded SSE Plc from Neutral to Buy, raising the price target to GBP 19.70 amid expectations of improved fundamentals and a shift towards lower-risk transmission investments. Despite a challenging year with a 13% decline in shares, SSE's long-standing dividend payments and strategic pivot towards regulated revenue sources are seen as positive indicators for future growth.
UBS has upgraded SSE Plc from Neutral to Buy, raising the price target to GBP 19.70 from GBP 19.35, as the stock trades near its 52-week low. Despite a challenging year with a 13% decline, SSE's shift towards lower-risk transmission investments and stable revenue sources is expected to enhance its long-term growth potential. The company has maintained dividend payments for 34 consecutive years, reflecting its financial stability.
Brian Arcese, portfolio manager at Foord Asset Management, suggests that a market correction could be healthy if U.S. economic growth and earnings stall, particularly given the high valuations of the S&P 500. He identifies potential catalysts for this correction, including slowing GDP growth and rising inflation, alongside high corporate earnings expectations. Arcese notes that while utilities remain relatively undervalued, the demand for electricity driven by data centers and AI growth presents investment opportunities.
SSE Plc’s CEO Alistair Phillips-Davies will retire next year as the company reaches the midpoint of its £20.5 billion green investment plan. He will stay on until a successor is appointed. Additionally, the completion of the Dogger Bank A offshore wind farm has been delayed to the second half of 2025 due to longer-than-expected turbine installations.
European markets are set for a positive opening, with the U.K.’s FTSE 100 expected to rise 36 points, Germany’s DAX up 38 points, France’s CAC gaining 11 points, and Italy’s FTSE MIB increasing by 68 points. Investors are focused on U.S. inflation data, with economists predicting a 0.2% increase in the consumer price index for October, which could influence the Federal Reserve's interest rate decisions. Earnings reports are anticipated from several major companies, including ABN Amro, RWE, and Allianz.
SSE plc
Companies
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
ubs strategists warn of tech stock valuations and bond yield risks
United States Dollar
BAE Systems plc
SSE plc
Leonardo S.p.a.
National Grid plc
Persimmon Plc
Tesco PLC
Microsoft Corp
SAP SE
Land Securities Group PLC
USA
JPN
GBR
Andrew Garthwaite
Show more
20:36 25.01.2025
ubs warns 5 percent treasury yield could signal equities downturn
British Pound Sterling
United States Dollar
Japanese Yen
Land Securities Group Plc
BAE Systems plc
SSE plc
Leonardo S.p.a.
National Grid plc
Persimmon Plc
Tesco PLC
SAP SE
USA
JPN
GBR
Andrew Garthwaite
Leonardo
Show more
11:37 23.01.2025
ubs warns of equity market turning point at 5 percent bond yield
United States Dollar
Land Securities Group Plc
BAE Systems plc
SSE plc
Leonardo S.p.a.
National Grid plc
Persimmon Plc
Tesco PLC
SAP SE
Microsoft Corporation
GBR
Andrew Garthwaite
Show more
11:33 23.01.2025
ubs maintains buy rating on eon with target price of 16.20 euros
Euro
VERBUND AG
SSE plc
National Grid plc
Uniper SE
Iberdrola, S.A.
Severn Trent PLC
DEU
Mark Freshney
Show more
14:06 09.01.2025
ubs upgrades sse to buy citing growth in transmission and fundamentals
13:36 09.01.2025
ubs upgrades sse stock to buy citing transmission focus and growth potential
11:26 09.01.2025
ubs upgrades sse stock citing transmission focus and growth potential
11:18 09.01.2025
market correction anticipated as earnings growth and economic indicators slow
07:18 22.11.2024
sse chief executive to retire as green investment plan progresses
08:36 13.11.2024
european markets poised for gains ahead of us inflation data release
Euro
Telecom Italia S.p.A.
Siemens Energy AG
Allianz SE
RWE AG
SSE plc
Alstom SA
ABN AMRO Bank N.V.
NLD
Ganesh Rao
Hakyung Kim
Donald Trump
Peter Boer
Aaron Dunn
Show more
06:21 13.11.2024
Trending
Subcategory
Corporate News
Stock Market Updates
Industry Trends
Industry Mergers & Acquisitions
Finance Mergers & Acquisitions
Banking Regulations
Global Financial Events
Workplace Trends
Retail and Consumer Goods
CEO Changes
Market Analysis and Predictions
Central Bank Actions
Startups & Entrepreneurship
Global Trade Developments
Government Policies
Financial Scams and Security
Domestic Politics
Private Equity Deals
Government Economic Policies
Supply Chain Management
Countries:
Companies:
JPMorgan Chase & Co.
Tesla, Inc.
Barclays PLC
Credit Suisse Lux Digital Healt
UniCredit S.p.A.
Bank of America Corporation
UBS Group AG
Deutsche Bank Money Market PP
The Goldman Sachs Group, Inc.
Apple Inc.
Banco BPM S.p.A.
BNP Paribas SA
Wells Fargo & Company
Commerzbank AG
Banco Santander, S.A.
CREDIT AGRICOLE
Lloyds Banking Group plc
Credit Suisse Strategic Income I
Amazon.com, Inc.
SpaceXCoin USD
Currencies:
United States Dollar
Euro
British Pound Sterling
Swiss Franc
Chinese Yuan
Indian Rupee
Japanese Yen
South Korean Won
Danish Krone
Hong Kong Dollar
Australian Dollar
Singapore Dollar
Offshore Chinese Yuan
Canadian Dollar
Mexican Peso
Russian Ruble
Chilean Peso
United Arab Emirates Dirham
Norwegian Krone
Swedish Krona
People: