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UBS warns that the implementation of proposed tariffs could lead to a rise in U.S. inflation to approximately 5%, as increased import costs are passed on to consumers. If the Federal Reserve perceives this inflation spike as 'transitory,' it may respond by cutting rates due to growth concerns.
UBS warns that the implementation of proposed tariffs could lead to a rise in U.S. inflation to approximately 5%, as increased import costs are passed on to consumers. If the Federal Reserve perceives this inflation spike as 'transitory,' it may ease concerns about economic growth.
UBS has lowered its price target for Norfolk Southern from $305 to $284 while maintaining a Buy rating, as the stock trades at $235.89. Despite strong fundamentals and a 44-year dividend payment streak, EPS estimates for 2025 have been revised down to $12.60 due to anticipated economic challenges. The company reported Q4 2024 EPS of $3.04, exceeding forecasts, but revenue fell slightly short at $3.02 billion, highlighting operational improvements and plans for future growth.
Santander US reports a surge in auto demand among middle-income Americans as they return to work, with 47% considering vehicle purchases in the coming year. Despite inflation concerns, 77% feel financially secure, and many are actively researching options or visiting dealerships. The study highlights a shift in attitudes towards homeownership, with only 29% viewing it as essential for financial prosperity.
A recent survey reveals that 46% of consumers have shifted funds to higher interest savings accounts, while 53% are considering personal loans for debt consolidation or large purchases. Confidence in financial prosperity is high, with 77% of middle-income Americans feeling secure, despite ongoing inflation concerns. As auto demand rises, 47% are contemplating vehicle purchases, driven by urgency amid price uncertainty.
UBS has lowered its price target for CSX Corporation to $36 from $39 while maintaining a Buy rating, citing challenges such as lower coal pricing and declining chemicals volume. Despite these headwinds, CSX boasts strong gross profit margins and significant annual revenue. Analysts from BofA and RBC also adjusted their targets to $33, while Benchmark remains optimistic with a $38 target, highlighting CSX's potential for EPS growth amid operational challenges.
Global equities faced their worst quarter since 2023, with U.S. stocks dropping 5.6% in March amid escalating trade tensions and tariff announcements. UBS maintains a positive outlook for U.S. equities, recommending strategies for 2025 that include capitalizing on market volatility, selective investments in non-U.S. markets, and using gold and oil as hedges against geopolitical risks.
UBS Global Research has downgraded EPS forecasts for U.S. rail companies, citing a potential softening in industrial markets. EPS estimates for Union Pacific, Norfolk Southern, and CSX have been reduced for 2025 and 2026, alongside lowered price targets, as productivity gains are not expected to fully offset the impact on earnings. The analysts highlight a trend of declining rail industry pricing and increased cyclicality, with coal yields and merchandise volume contributing to slower revenue growth.
UBS analysts suggest that demand for U.S. investment-grade credit remains strong despite potential tariffs announced by President Trump, which could disrupt international trade. They believe future Federal Reserve interest rate cuts and a steeper yield curve will encourage investment in U.S. fixed income products, although competition from overseas equity markets may increase. Trump's tariff plans, aimed at correcting trade imbalances and boosting manufacturing, could lead to higher inflation and economic growth concerns.
The Swiss National Bank (SNB) remains cautious about negative interest rates, viewing them as a last resort to maintain price stability amid potential US sanctions on foreign exchange interventions. While the SNB's balance sheet has expanded significantly due to these interventions, recent reductions in foreign currency holdings have strengthened the Swiss franc. The central bank is closely monitoring inflation trends, with a key interest rate currently at 0.25%, and may consider further easing if deflation risks increase.
Inflation and Monetary Impact
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ubs warns tariffs could elevate us inflation to five percent
05:05 03.04.2025
ubs warns tariffs could raise us inflation to five percent
05:05 03.04.2025
ubs lowers norfolk southern price target while maintaining buy recommendation
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