After the weak jobs report released in July, UBS remains cautious about a potential U.S. economic slowdown. However, recent inflation data has eased its recession fears. The financial institution is encouraged by balanced economic indicators and strong retail sales figures, which suggest that the risk of a recession or prolonged inflation is receding. As a result, UBS advises investors to focus on quality growth stocks, as it believes they are well-positioned to outperform if economic concerns grow.
Meanwhile, the S&P 500 (SPX) has shown surprising strength after a sharp decline in late July and early August. The index has rallied significantly, regaining much of its losses and coming close to a new record high. BTIG noted that despite the lack of a broad market selloff at the recent lows, the market’s strong performance is undeniable, and they now see 5,566 as the next resistance level, with 5,670 marking the all-time high.
BTIG no longer expects a retest of last week’s lows but suggests that some consolidation may occur before the market pushes back to its highs. They see the 5,400 level as new support in the coming days.
Is SPY Stock Worth Buying?
Overall, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 404 Buys, 93 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 15% year-to-date rally, the average SPY price target of $611 per share implies 10.41% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
